Robin Hanson on Simple, Evidence Backed Models

by Raemon 1 min read16th Apr 201911 comments

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This is link to a Hanson post that is primarily about tax returns, and whether they should be public. It was an interesting foray into the considerations that bear on that topic.

But I was particularly interested in the opening paragraph, which had a useful lens:

Our simplest model of an economy is: supply and demand. This model has many simple implications for policy. Now we know of many much more complicated economic models, which often have quite different policy implications. But often we are not sure which more complex models actually apply well to any given situation. So we have to worry that people favor more complex models mainly to justify their preferred policies. Knowing this pushes me toward recommending the policies implied by supply and demand, unless I see unusually clear evidence to support a different economic model. (FYI, the evidence that fixed costs exists seems plenty clear, so I really mean supply & demand with fixed costs.)
In our simplest modes of information, people are better off when they have more information, and also when information is distributed more symmetrically. There is a vast world of much more complicated models, but it is often hard to tell which more complex models apply well to given situations, and many probably favor particular models to justify preferred policies. So as with supply and demand, this uncertainty pushes me to favor the simplest info models, and their policy recommendations favoring more info and more symmetric info.