In light of the discussion he seems to be hedging bets in this area. I’m not sure if that the right strategy from the ex-risk perspective. At the very least it seems inconsistent.
Remember he’s playing an iterated game. So, if we assume that right now he has very little information about which area is the most important to invest in or which areas are most likely to produce the best return, playing a wider distribution in order to gain information in order maximize the utility of later rounds of donations/investments seems rational.
I remember reading, on the topic of optimal charity, that it’s only rational to select a single cause to donate to… until the point of giving enough money to noticeably change the marginal utility of each additional dollar. (Thiel has that much money, of course.) This information-gathering strategy could be a new reason for spreading donations at the level of large-scale donations, if it hasn’t been discussed before.
I remember reading and enjoying that article (this one, I think).
I would think that the same argument would apply regardless of the scale of the donations (assuming there aren’t fixed transaction costs (which might not be valid)). My read would be that it comes down to the question of risk versus uncertainty. If there is actual uncertainty, investing widely might make sense if you believe that those investments will provide useful information to clarify the actual problem structure so that you can accurately target future giving.
In light of the discussion he seems to be hedging bets in this area. I’m not sure if that the right strategy from the ex-risk perspective. At the very least it seems inconsistent.
I think it could be consistent if you treat his efforts as designed to gather information.
Only if he thinks he can only weakly affect outcomes, or exert large amount of control as the evidence starts coming in.
Remember he’s playing an iterated game. So, if we assume that right now he has very little information about which area is the most important to invest in or which areas are most likely to produce the best return, playing a wider distribution in order to gain information in order maximize the utility of later rounds of donations/investments seems rational.
I remember reading, on the topic of optimal charity, that it’s only rational to select a single cause to donate to… until the point of giving enough money to noticeably change the marginal utility of each additional dollar. (Thiel has that much money, of course.) This information-gathering strategy could be a new reason for spreading donations at the level of large-scale donations, if it hasn’t been discussed before.
I remember reading and enjoying that article (this one, I think).
I would think that the same argument would apply regardless of the scale of the donations (assuming there aren’t fixed transaction costs (which might not be valid)). My read would be that it comes down to the question of risk versus uncertainty. If there is actual uncertainty, investing widely might make sense if you believe that those investments will provide useful information to clarify the actual problem structure so that you can accurately target future giving.
It’s the same reason. You expect the marginal value of information to decline rapidly.