I use a heuristic which tells me to ignore Pascal-like wagers
I am not sure exactly what using this heuristic entails. I certainly understand the motivation behind the heuristic:
when you multiply an astronomical utility (disutility) by a miniscule probability, you may get an ordinary-sized utility (disutility), apparently suitable for comparison with other ordinary-sized utilities. Don’t trust the results of this calculation! You have almost certainly made an error in estimating the probability, or the utility, or both.
But how do you turn that (quite rational IMO) lack of trust into an action principle? I can imagine 4 possible precepts:
Don’t buy lottery tickets
Don’t buy insurance
Don’t sell insurance
Don’t sell back lottery tickets you already own.
Is it rationally consistent to follow all 4 precepts, or is there an inconsistency?
Another red flag is when someone else helpfully does the calculation for you—and then expects you to update on the results. Looking at the long history of Pascal-like wagers, that is pretty likely to be an attempt at manipulation.
“I believe SIAI’s probability of success is lower than what we can reasonably conceptualize; this does not rule it out as a good investment (since the hoped-for benefit is so large), but neither does the math support it as an investment (donating simply because the hoped-for benefit multiplied by the smallest conceivable probability is large would, in my view, be a form of falling prey to “Pascal’s Mugging”.”
So, what is the probability that my house will burn? It may depend on whether I start smoking again. I hope the probability of both is low, but I don’t know what it is.
I’m not sure exactly what the definition of Pascal’s-Wager-like should be. Is there a definition I should read? Should we ask Prase what he meant? I understood the term to mean anything involving small estimated probabilities and large estimated utilities.
We know the probability to a reasonable level of accuracy—eg consider acturial tables. This is different from things like Pascal’s wager where the actual probability may vary by many orders of magnitude from our best estimate.
This is different from things like Pascal’s wager where the actual probability may vary by many orders of magnitude from our best estimate.
According to the Bayesians, our best estimate is the actual probability. (According to the frequentists, the probabilities in Pascal’s wager are undefined.)
What parent means by “We know the probability to a reasonable level of accuracy—eg consider acturial tables” is that it is possible for a human to give a probability without having to do or estimate a very hairy computation to compute a prior probability (the “starting probability” before any hard evidence is taken into account). ADDED. In other words, it should have been a statement about the difficulty of the computation of the probability, not a statement about the existence of the probability in principle.
It should be a statement about the dependence of the probability on the priors. The more the probability depends on the priors, the less reliable it is.
I indeed am motivated by reasons you gave, so lotteries aren’t concern for this heuristics, since the probability is known. In fact, I have never thought about lotteries this way, probably because I know the probabilities. The value estimate is a bit less sure (to resonably buy a lottery, it would also need a convex utility curve, which I probably haven’t), but the lotteries deal with money, which make pretty good first approximation for value. Insurances are more or less similar, and not all of them include probabilities too low or values too high to fall into the Pascal-wager category.
Actually, I do buy some most common insurances, although I avoid buying insurances against improbable risks (meteorite fall etc.). I don’t buy lotteries.
The more interesting aspect of your question is the status-quo conserving potential inconsistency you have pointed out. I would probably consider real Pascal-wagerish assets to be of no value and sell them if I needed the money. This isn’t exactly consistent with the “do nothing” strategy I have outlined, so I have to think about it a while to find out whether the potential inconsistencies are not too horrible.
I am not sure exactly what using this heuristic entails. I certainly understand the motivation behind the heuristic:
when you multiply an astronomical utility (disutility) by a miniscule probability, you may get an ordinary-sized utility (disutility), apparently suitable for comparison with other ordinary-sized utilities. Don’t trust the results of this calculation! You have almost certainly made an error in estimating the probability, or the utility, or both.
But how do you turn that (quite rational IMO) lack of trust into an action principle? I can imagine 4 possible precepts:
Don’t buy lottery tickets
Don’t buy insurance
Don’t sell insurance
Don’t sell back lottery tickets you already own.
Is it rationally consistent to follow all 4 precepts, or is there an inconsistency?
Another red flag is when someone else helpfully does the calculation for you—and then expects you to update on the results. Looking at the long history of Pascal-like wagers, that is pretty likely to be an attempt at manipulation.
“I believe SIAI’s probability of success is lower than what we can reasonably conceptualize; this does not rule it out as a good investment (since the hoped-for benefit is so large), but neither does the math support it as an investment (donating simply because the hoped-for benefit multiplied by the smallest conceivable probability is large would, in my view, be a form of falling prey to “Pascal’s Mugging”.”
http://blog.givewell.org/2009/04/20/the-most-important-problem-may-not-be-the-best-charitable-cause/
What do those examples have to do with anything? In those cases we actually know the probabilities so they’re not Pascal’s-Wager-like scenarios.
So, what is the probability that my house will burn? It may depend on whether I start smoking again. I hope the probability of both is low, but I don’t know what it is.
I’m not sure exactly what the definition of Pascal’s-Wager-like should be. Is there a definition I should read? Should we ask Prase what he meant? I understood the term to mean anything involving small estimated probabilities and large estimated utilities.
We know the probability to a reasonable level of accuracy—eg consider acturial tables. This is different from things like Pascal’s wager where the actual probability may vary by many orders of magnitude from our best estimate.
According to the Bayesians, our best estimate is the actual probability. (According to the frequentists, the probabilities in Pascal’s wager are undefined.)
What parent means by “We know the probability to a reasonable level of accuracy—eg consider acturial tables” is that it is possible for a human to give a probability without having to do or estimate a very hairy computation to compute a prior probability (the “starting probability” before any hard evidence is taken into account). ADDED. In other words, it should have been a statement about the difficulty of the computation of the probability, not a statement about the existence of the probability in principle.
It should be a statement about the dependence of the probability on the priors. The more the probability depends on the priors, the less reliable it is.
That would be my reading.
I indeed am motivated by reasons you gave, so lotteries aren’t concern for this heuristics, since the probability is known. In fact, I have never thought about lotteries this way, probably because I know the probabilities. The value estimate is a bit less sure (to resonably buy a lottery, it would also need a convex utility curve, which I probably haven’t), but the lotteries deal with money, which make pretty good first approximation for value. Insurances are more or less similar, and not all of them include probabilities too low or values too high to fall into the Pascal-wager category.
Actually, I do buy some most common insurances, although I avoid buying insurances against improbable risks (meteorite fall etc.). I don’t buy lotteries.
The more interesting aspect of your question is the status-quo conserving potential inconsistency you have pointed out. I would probably consider real Pascal-wagerish assets to be of no value and sell them if I needed the money. This isn’t exactly consistent with the “do nothing” strategy I have outlined, so I have to think about it a while to find out whether the potential inconsistencies are not too horrible.