Great essay. Before this, I thought that the impact of more noisy signals about Normies was mainly through selectors being risk-averse. This essay pointed out why even if selectors are risk neutral, noisy signals matter by increasing the weight of the prior. Given that selectors also tend to have negative priors about Normies, noisy signals really function to prevent positive updates.
Great essay. Before this, I thought that the impact of more noisy signals about Normies was mainly through selectors being risk-averse. This essay pointed out why even if selectors are risk neutral, noisy signals matter by increasing the weight of the prior. Given that selectors also tend to have negative priors about Normies, noisy signals really function to prevent positive updates.