This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
One curious thing I noticed about SBF on the Tyler Cowen podcast is that he had a very odd idea about the St. Petersburg Paradox. At the time, I found myself very much unable to steel man this.
I'll just interject here that to me, this sounds completely insane. For those less familiar with decision theory, this not an abstruse philosophical question - it's simply a mathematical fact with probability approaching 1 (specifically, 0.49^n for large n), SBF will destroy the world.
At the time I found this odd. Does SBF not understand Kelly betting? This twitter thread, unearthed from 2 years ago, suggests maybe he doesn't?
https://twitter.com/breakingthemark/status/1591114381508558849
I don't see how he, or Caroline, or the rest of his folks got to where they did without understanding kelly. Pretty sure you don't get to be a junior trader at Jane St. without understanding it.
My best attempt at a steelman is that because he's altruistic, the linear regime of his utility function goes a lot further than for Jeff Bezos or someone else with an expensive car collection. As in, imagine each individual has a sequence of things they can get with diminishing marginal utility - $u_0 > u_1 > ... > u_n > ...$, $u_n \rightarrow 0$ and each thing has unit cost. A greedy gambler has sublinear utility since they first buy u_0, then u_1, etc. By definition, $\sum_{i=0}^N u_i < N u_0$.
But since SBF is buying stuff for everyone, he gets $N u_0$.
Then again, this is still clearly wrong - eventually he runs out of people who don't have $u_0$, and he needs to start buying $u_1$. His utility is still diminishing.
Is there some esoteric branch of decision theory that I'm unfamiliar with - perhaps some strange many worlds interpretation - which suggests this isn't crazy? Is he just an innumerate fraud who truly believes in EA, but didn't understand the math?
I would love any insights the community can share.
Kelly betting is optimal if (a) you're allowed to vary the size of your bets, and (b) you have an infinite time horizon. Cowen's example reads to me like you can't vary your bets, so Kelly wouldn't apply. The example also states that each time you double the number of Earths, so you never run out of people to buy stuff for.
It's not what I would do in that situation, but I don't think it's mathematically incorrect; it's just a demonstration of how strange having a linear utility function really is. Whether you agree with SBF's utility there is more of a philosophical question.
I agree that applying this argument to finance or crypto - where you very much can size your bets - is a little odd, unless you also believe the time horizon is short. I suppose if you think we'll all be transformed by AGI next year, may as well rug pull while you can?
Kelly "applies" even if you can't vary your bet size. Kelly tells you what the maximum bet size you should be willing to take is, so you would take a bet if it's size is below what Kelly tells you, reject otherwise.
Sorry, but that's wrong. Kelly tells you what the optimal bet would be, but it doesn't imply you should reject anything greater than that. If the optimal bet is $5, and you have to choose between $5.0000001 or $0, you want the former.
More generally, if you have to choose between non-Kelly alternatives, you may need to use your utility function to make the decision. SBF claims his utility is linear, in which case a 51% chance to double the world is worth it, for him.
Kelly tells you that taking bets past kelly optimal causes your growth rate to decline very fast. While yes, kelly optimal + epsilon is still good (by continuity of kelly formula), the risk generally lives to the right.
This is doubly true if your probabilities are estimates, and not actually certain - which is what I attempted to illustrate with the dashed vertical line.
Take a look at the graph I've attached. It's my general thinking on the topic, though possibly I am misunderstanding something? I am not in any sense an expert or theoretician - just a guy who uses Kelly as a heuristic. (And in an illiquid markets context where I cannot choose arbitrary bet sizes.)
/images/16684405036219563.webp
Yes, I absolutely agree that "don't go above Kelly" is a good heuristic - especially since you're probably overestimating the value of the bet.
I'm more saying that the specific thought-experiment described in that quote is deeply weird in a number of ways; if you accept Cowen and SBF's premises, blowing up the Earth with p = 1 - eps really is worth it.
I mean, don't do that! But the argument here is philosophical rather than mathematical. "Linear utility is bad", or "expected value produces strange results with unbounded rewards", or "what the hell does this have to do with crypto", something like that.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link