I agree with your points about risk budgets not being logically necessary because risks are generally linear and independent. But I think about risk budgets as a supplement to the normal decision-making process, because people aren’t good at making one-off decisions in the abstract.
If the party costs 1 hour of expected life, I’ll go. If it’s 2 hours, would I still go? 3 hours? It’s hard to really wrestle with that decision and figure out where the tradeoffs aren’t worth it. “1 hour” is already a more concrete framing than “2 micromorts”, but you’re still trading off a concrete outcome (going to a party) with something pretty abstract (1 hour expected value of life), so it’s hard to make logically consistent decisions that don’t vary with your mood, etc.
If, instead, you set an overall weekly risk budget, you can then trade off between specific concrete choices. “If I go to this party, I can’t go to the grocery store. Which would I rather do?”
So it helps to make yourself more consistent and make your decisions more concrete. Help you “set policies” (and be consistent with them) vs. “making initial decisions” to gjm’s point in the other comment.
Hmm! I think the main crux of our disagreement is over “how abstract is ‘1 hour of life expectancy’?”: you view it as pretty abstract, and I view it as pretty concrete.
The reason I view it as concrete is: I equate “1 hour of life expectancy” to “1 hour spent driving,” since I mildly dislike driving. That makes it pretty concrete for me. So, if there’s a party that I’m pretty excited about, how far would I be willing to drive in order to attend? 45 minutes each way, maybe? So “a party I’m pretty excited about” is worth about 3 micromorts to me.
Does this… sound sane?
I’m in a house that budgets pretty aggressively, so, in practice, I budget, and maybe I’m wrong about how this would go; but, if I ditched budgeting entirely, and I was consistently bad at assessing tradeoffs, I would expect that I could look back after two weeks and say, “Whoa, I’ve taken on 50 life-hours of risk over the last two weeks, but I don’t think I’ve gotten 50 hours of life-satisfaction-doubling joy or utility out of seeing people. Evidently, I have a strong bias towards taking more risk than I should. I’d better retrospect on what I’ve been taking risk doing, and figure out what activities I’m overvaluing.”
I agree with your points about risk budgets not being logically necessary because risks are generally linear and independent. But I think about risk budgets as a supplement to the normal decision-making process, because people aren’t good at making one-off decisions in the abstract.
If the party costs 1 hour of expected life, I’ll go. If it’s 2 hours, would I still go? 3 hours? It’s hard to really wrestle with that decision and figure out where the tradeoffs aren’t worth it. “1 hour” is already a more concrete framing than “2 micromorts”, but you’re still trading off a concrete outcome (going to a party) with something pretty abstract (1 hour expected value of life), so it’s hard to make logically consistent decisions that don’t vary with your mood, etc.
If, instead, you set an overall weekly risk budget, you can then trade off between specific concrete choices. “If I go to this party, I can’t go to the grocery store. Which would I rather do?”
So it helps to make yourself more consistent and make your decisions more concrete. Help you “set policies” (and be consistent with them) vs. “making initial decisions” to gjm’s point in the other comment.
Would be interested in your thoughts!
Hmm! I think the main crux of our disagreement is over “how abstract is ‘1 hour of life expectancy’?”: you view it as pretty abstract, and I view it as pretty concrete.
The reason I view it as concrete is: I equate “1 hour of life expectancy” to “1 hour spent driving,” since I mildly dislike driving. That makes it pretty concrete for me. So, if there’s a party that I’m pretty excited about, how far would I be willing to drive in order to attend? 45 minutes each way, maybe? So “a party I’m pretty excited about” is worth about 3 micromorts to me.
Does this… sound sane?
I’m in a house that budgets pretty aggressively, so, in practice, I budget, and maybe I’m wrong about how this would go; but, if I ditched budgeting entirely, and I was consistently bad at assessing tradeoffs, I would expect that I could look back after two weeks and say, “Whoa, I’ve taken on 50 life-hours of risk over the last two weeks, but I don’t think I’ve gotten 50 hours of life-satisfaction-doubling joy or utility out of seeing people. Evidently, I have a strong bias towards taking more risk than I should. I’d better retrospect on what I’ve been taking risk doing, and figure out what activities I’m overvaluing.”
Or maybe I’m overestimating my own rationality!