Nation of Beancounters

Incentives are incompatible with the Truth – as is the lack of incentives

Posted in Uncategorized by Navin Kumar on April 19, 2011

Robin Hansom phrases the dilemma perfectly:

Reading the novel Lolita while listening to Winston’s Summer, thinking a fond friend’s companionship, and sitting next to my son, all on a plane traveling home, I realized how vulnerable I am to needing such things. I’d like to think that while I enjoy such things, I could take them or leave them. But that’s probably not true. I like to think I’d give them all up if needed to face and speak important truths, but well, that seems unlikely too. If some opinion of mine seriously threatened to deprive me of key things, my subconscious would probably find a way to see the reasonableness of the other side.

So if my interests became strongly at stake, and those interests deviated from honesty, I’ll likely not be reliable in estimating truth. Yet as my interests fade to zero, I also suspect my opinions to be dominated by random weak influences, such as signaling pressures, that also have little to do with truth. My reliability seems contingent on my having atypically good incentives to get it right.

The rest is here. He recommends prediction markets, although I suspect that they’d be usesless for such thin markets as personal affairs.

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