Option value. They’re not paying for a vaccine that can’t be used, they’re paying for a vaccine that MIGHT be usable in the near- or medium-term future. Paying for many options before approval so you’re ready with volume for the one(s) that get approved is +EV in most scenarios.
I’m honestly surprised by someone on LessWrong engaging in that kind of Black White thinking. If you are uncertain about whether or not a given vaccine gets approved, there’s a probability of it getting approved and you can calculate expected utility given the cost you pay for the vaccines that might or might not be approved.
Is the idea of thinking in terms of probability new to you, or is there some way that using it in a political context is hard?
The question was “why didn’t we ramp up sooner?”. I answered the question as best I knew how. Everyone is acting like I’m the one that decided to not use option pricing.
And yes, government paying for things that might not work is hard. Besides generic mind killing, there are people that don’t want the government to spend money and the people who don’t believe in vaccines at all. They all vote.
I mean....sure.
But why would the government, or anyone, pay for a vaccine that couldn’t be used? An unapproved vaccine does nothing for anyone.
Option value. They’re not paying for a vaccine that can’t be used, they’re paying for a vaccine that MIGHT be usable in the near- or medium-term future. Paying for many options before approval so you’re ready with volume for the one(s) that get approved is +EV in most scenarios.
Which is why we proposed exactly that, at the end of April: https://www.lesswrong.com/posts/uXb4gcDP2fgBPcMHJ/market-shaping-approaches-to-accelerate-covid-19-response-a
Now published: https://f1000research.com/articles/9-1154
Unfortunately, we couldn’t get policymakers on board.
I’m honestly surprised by someone on LessWrong engaging in that kind of Black White thinking. If you are uncertain about whether or not a given vaccine gets approved, there’s a probability of it getting approved and you can calculate expected utility given the cost you pay for the vaccines that might or might not be approved.
Is the idea of thinking in terms of probability new to you, or is there some way that using it in a political context is hard?
The question was “why didn’t we ramp up sooner?”. I answered the question as best I knew how. Everyone is acting like I’m the one that decided to not use option pricing.
And yes, government paying for things that might not work is hard. Besides generic mind killing, there are people that don’t want the government to spend money and the people who don’t believe in vaccines at all. They all vote.