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Making decisions under moral uncertainty

I think I like this post, but not the approaches.

A correct solution to moral uncertainty must not be dependent on cardinal utility and requires some rationality. So Borda rule doesn’t qualify. Parliamentary model approaches are more interesting because they rely on intelligent agents to do the work.

An example of a good approach is the market mechanism. You do not assume any cardinal utility. You actually do not do anything directly with the preferences you have a probability distribution over at all. You have an agent for each and extrapolate what that agent would do, if they had no uncertainty over their preferences and rationally pursued them, when put in a carefully designed environment that allows them to create arbitrary binding consensual precommitments (“contracts”) with other agents, and weights each agent’s influence over the outcomes that the agents care about according to your probabilities.

What is tricky is making the philosophical argument that this is indeed the solution to moral uncertainty that we are interested in. I’m not saying it is the correct solution. But it follows some insights that any correct solution should:

  • do not use cardinal utility, use partial orders;
  • do not do anything with the preferences yourself, you are at high risk of doing something incoherent;
  • use tools that are powerful and universal: intelligent agents, let them bargain using full Turing machines. You need strong properties, not (for example) mere Pareto efficiency.
Perfect Competition

Fragility of value is used correctly only to make very different points from what you are stating here, that must result from how different the preference orderings you obtain are from the original preference orderings if you make changes to the complex computation that the values are. Consumer preferences in general equilibrium theory are a real-valued function whose domain is the consumption set, a subset of a full commodity space. This function can be used to define an order relation that represents the consumer’s preferences, each represented by any of an infinity of functions since you can compose them with any strictly increasing function. Consumer preferences are not the same thing as agents’ preferences or values, which are not at all related to commodity bundles, and don’t have a consumption space as domain, even though they too can be used to define order relations. You cannot make this argument confusing goods and values. The values that are fragile are not the consumer preferences. As far as the actual preferences determine consumer preferences over commodity bundles, they determine the customer’s demand function according to prices and consumer endowments or wealth and translate into buying and selling decisions, and that is relevant to perfect competition. The rest of the preferences is entirely orthogonal to perfect competition—if it wasn’t, then it would, contradicting our assumption, have contributed to determining consumer preferences.

Effect of Advertising
because apparently the strongest evidence for "being the kind of person who buys X" is having bought X recently


In general, that you’ve bought something is evidence that you’re the kind of person who buys that thing. Furthermore, if you’ve bought certain items recently, you are far more likely to buy a similar product (for example, you regret the purchase and want to replace it) than someone who hasn’t.

Pricing externalities is not necessarily economically efficient

The statement says “if transaction costs are zero, the market produces the efficient outcome”, but what is most interesting is the equivalent contrapositive “if the market didn’t produce the efficient outcome, it was because of transaction costs”.

I would add that the problem is not only transaction costs but also irrationality. You will not get the efficient outcome if the transaction costs are sufficiently low but the agents are not rational enough to think of the transaction or to consent to it. Also, some transaction costs can be worked around, so the problem is irreducible transaction costs and irrationality.

I would also add that I think the conclusion applies to other coordination problems, market failures, and games in general, not just externalities. Many aggregation mechanisms can always produce the efficient outcome in most or all such problems if transaction costs are low enough and the agents rational enough. The market mechanism is not the only one; if you allow all agents to self-modify and prove to other agents that they did so, that should also be able to solve these problems if transaction costs are low and agents rational enough.

But no mechanism will always be able to produce an efficient outcome even with high transaction costs or bounded rationality. For example, I think we can conceive of games in which producing an efficient outcome requires logical omniscience and a halting oracle (we might design a game in which producing an efficient outcome requires knowing the googolplexth Mersenne prime). Such a game might be solved by the market mechanism only if the agents were as rational as AIXIs.

Algorithms of Deception!

Category gerrymandering doesn’t seem like a different algorithm from selective reporting. In both cases, the reporter is providing only part of the evidence.