Eliezer_Yudkowsky: I’m not sure I see the relevance of evolutionary theory to Enron. According to the characterization you quoted, the problem was that the stakes were so high that people cheated. Why do evolution’s insights help me see that? That mishap can be explained through poor incentive alignment: what was optimal behavior for a trader was not regarded by Enron as optimal behavior. The disutility to Enron of “false profits” was not reflected in an individual trader’s utility curve.
So Skilling picked a bad incentive structure. Does everyone who picks a bad incentive structure fancy himself an evolution conjurer?
So Skilling picked a bad incentive structure. Does everyone who picks a bad incentive structure fancy himself an evolution conjurer?
If one thinks of evolution as the process of deriving “better” results through a selection criteria and a change process, then yes, Skilling was conjuring evolution, though he did not realize it. He established a selection criteria (individual performance numbers) and the employees themselves provided the change process. As he repeatedly selected against the weakest performers (according to his insufficiently rational criteria), the employees changed through what they found the easiest way to achieve “better performance”. The company evolved as the employees changed their behavior.
Eliezer_Yudkowsky: I’m not sure I see the relevance of evolutionary theory to Enron. According to the characterization you quoted, the problem was that the stakes were so high that people cheated. Why do evolution’s insights help me see that? That mishap can be explained through poor incentive alignment: what was optimal behavior for a trader was not regarded by Enron as optimal behavior. The disutility to Enron of “false profits” was not reflected in an individual trader’s utility curve.
So Skilling picked a bad incentive structure. Does everyone who picks a bad incentive structure fancy himself an evolution conjurer?
If one thinks of evolution as the process of deriving “better” results through a selection criteria and a change process, then yes, Skilling was conjuring evolution, though he did not realize it. He established a selection criteria (individual performance numbers) and the employees themselves provided the change process. As he repeatedly selected against the weakest performers (according to his insufficiently rational criteria), the employees changed through what they found the easiest way to achieve “better performance”. The company evolved as the employees changed their behavior.