I suspect that it would be useful to distinguish between “zoomed out” inefficiency, and “zoomed in” inefficiency. When you zoom in and observe the fact that employers don’t give out IQ tests, I agree that we shouldn’t draw any conclusions. But if you zoom out and observe the fact that IQ tests have been around for 100 years and still aren’t being used by employers, I think that really starts to point in the direction of indifference. (I’m not confident at all that IQ tests are a good example, but hopefully it communicates the more general point I’m trying to make.)
I say this because in the long run, the Invisible Hand does seem to exist. Ie. in the long run, humans do move towards efficiency. And so if humans aren’t moving towards efficiency over a long period of time, it would follow that they might not really care about the thing. I don’t think such a long run observation proves anything—there are still other possible explanations—but it does seem to me to point in the direction of indifference pretty hard.
I agree it’s a messy example, I used it more because it was the motivating example than because it was the best illustration; this was originally from the post about IQ tests in general and got split out since I realized I had an important general point and didn’t want it to be lost.
I do agree that over time, the failure of anyone to do X, where X is an established, known, easy-to-replicate, clearly does what it means to do at a reasonable price procedure, is much stronger evidence than local failure to X. No question it points towards indifference! But for more discussion of the details in this case, which explain my full opinion on the case, see the original post this split off from.
If we were willing to admit the students who would benefit most by objective criteria like income or career success, we could use prediction markets. The complete lack of interest in this suggests that isn’t really the agenda.
Robin is saying that lack of interest in using prediction markets for student admissions shows that universities don’t actually want the best students. I can think of many other possible explanations:
They have never heard of prediction markets. It’s a fairly obscure concept.
They don’t believe it would work.
They have moral issues with letting strangers bets decide if someone gets admitted, or they think it could be manipulated.
There are dozens of other strange methods that someone thinks would solve all their problems.
I suspect that it would be useful to distinguish between “zoomed out” inefficiency, and “zoomed in” inefficiency. When you zoom in and observe the fact that employers don’t give out IQ tests, I agree that we shouldn’t draw any conclusions. But if you zoom out and observe the fact that IQ tests have been around for 100 years and still aren’t being used by employers, I think that really starts to point in the direction of indifference. (I’m not confident at all that IQ tests are a good example, but hopefully it communicates the more general point I’m trying to make.)
I say this because in the long run, the Invisible Hand does seem to exist. Ie. in the long run, humans do move towards efficiency. And so if humans aren’t moving towards efficiency over a long period of time, it would follow that they might not really care about the thing. I don’t think such a long run observation proves anything—there are still other possible explanations—but it does seem to me to point in the direction of indifference pretty hard.
I agree it’s a messy example, I used it more because it was the motivating example than because it was the best illustration; this was originally from the post about IQ tests in general and got split out since I realized I had an important general point and didn’t want it to be lost.
I do agree that over time, the failure of anyone to do X, where X is an established, known, easy-to-replicate, clearly does what it means to do at a reasonable price procedure, is much stronger evidence than local failure to X. No question it points towards indifference! But for more discussion of the details in this case, which explain my full opinion on the case, see the original post this split off from.
Maybe this is a good example.
Robin is saying that lack of interest in using prediction markets for student admissions shows that universities don’t actually want the best students. I can think of many other possible explanations:
They have never heard of prediction markets. It’s a fairly obscure concept.
They don’t believe it would work.
They have moral issues with letting strangers bets decide if someone gets admitted, or they think it could be manipulated.
There are dozens of other strange methods that someone thinks would solve all their problems.