63. Greedy Benefit-of-Doubt Allocation 🔗

Claiming all benefit of doubt around uncertain events for yourself seems to me to be the original sin in a complex world.

It is fine to place risky bets under uncertainty and enjoy your wins. It’s asserting certainties about the world that turns boldness into corruption.

By which I mean: betting that a fair coin (with a known long-run 50-50 H/T ratio and documented i.i.d behavior over last 1000 tosses, say) will produce 3 heads in a row is risky (1/8th chance) and if you turn $1 into $7.50 by betting that, you’re bold. Enjoy your $6.50.

But...

...if you go on to claim that you’re sure the next toss will 100% be heads because mystic magic, and sucker people who don’t know the coin’s demonstrated fair history into giving you money to bet on it, you’re being corrupt.

You could still get away with it (50% chance).

Here a combo of counterparty ignorance of the past, and known uncertainty about the future creates a benefit of doubt allocation problem.

You can’t stop people believing strange things but you can avoid cashing out all doubt for yourself by lying about reality as you see it.

Many made money on prediction markets by betting against irrational Trump bets in recent weeks. This is fine. Congrats on separating suckers from $. It’s people who knowingly continue to feed false certainties by cashing out doubt in self-serving ways who strike me as corrupt.

I’m thinking of course of Hawley, Cruz etc. People who are willing to do what Romney called out most clearly — not telling their voters the truth. Not even somebody else’s truth. Their truths.

There’s always doubt and uncertainty. The issue is who benefits from it.

The test of both intelligence and ethics is whether you are willing to tolerate a difference between your private allocation of doubts and your public allocation.

Extreme case: parent is 100% certain there is no Santa, but acts 100% certain there is when talking to 4-year old.

Cruz, Hawley etc. are indulging in Santa-lies to adults to carve up electoral empire being left behind by Trump.

If you actually believe there was widespread fraud, you’re just an idiot.

If you act like you believe, to gain power over idiots who do believe... you’re corrupt.

Again, we’re not talking certainties. It’s an uncertain world and there is always doubt. There’s a one in a billion chance the fraud case is true. There’s a one in a trillion chance the moon landings were faked.

Corruption is acting like these are more likely than not. 51%+

We live in an uncertain world, but find it harder to say “I’m not sure” than “I was wrong.”

It’s harder to live in uncertainty than to even assert wrongness. Because acting 10p% certain of anything including your own wrongness, looks brave.

People respond to any sign of greater certainty than events actually permit or that they themselves feel. This is a believe-in-Santa impulse. People would rather believe that maybe this confident parental-proxy figure knows something that lowers the uncertainty. Wishful trust.

I admire the technical sophistication of those who make bold bets, win, visibly survive and develop a nice winning record of calling-it-right bets. But event outcomes are not truths. Sucker exploits are not proofs. Prowess is admirable but integrity takes more.

Feeding the mythology of your own unusual win record to turn it into a charisma of unreasonable rightness... the self-congratulatory self-authoring tendencies based on attribution bias... it now strikes me as moral corruption, not just shallow vanity.

The thing is, projecting an air of greater certainty about how the world works brings benefits beyond the wins of the immediate prediction/betting game it may rest on. Making a selfish gran for those benefits at the expense of the quality of others beliefs... corruption.

There are perhaps benevolent cases. Pretending Santa is real for eg.

There are even cases where you might in fact really know things others don’t, but merely exaggerate them (eg product visionaries projecting reality distortion fields and crafting personal myths)

But in general, when I see people being more righteously certain than events merit, my priors point to corruption, not special knowledge.

I think people mostly do this unconsciously. Risk taking leads to self-talk to boost felt certainty and lower courage needs.

You want to take a 1 in 10 shot. You only have enough courage for a 1 in 2 risk. So you talk confidently, get others betting with you, misrepresent the risks both to actually reduce it for yourself and gain some courage from social proof kool-aid. You’re socializing your risks.

How often do you see people say openly, “this is a wild outlier bet, but I’m making it anyway because I’m tempted by the upside; don’t follow me unless you want to be as crazy as me”

Adults don’t tell adults lies about how certain the world is unless they want to exploit them. It’s a form of dehumanizing contempt that unfortunately works as a self-fulfilling prophecy. Tell a captive audience of adults “Santa is real” long enough, they’ll turn into children.

I didn’t enjoy that attempted recent takedown of Taleb. I think it was a tedious misfire. Taleb’s real corruption lies in his posture of confident halo-effect certainty which goes against every actual cogent point he’s made, which would recommend a humble, no-Santa-lies posture.

Basically, the Golden Rule for a complex, uncertain world is this: perform the actual uncertainty you feel about the world. Don’t knowingly act more certain than you feel.

Unless you’re talking to children or mentally/physically injured adults who need some temporary kindness.

(the converse risk also exists: sandbagging, or acting less certain than you feel, but is IMO less of a catalyst for corruption because it is self correcting — the first time you sandbag, people learn to see through your bluff)

Gonna leave you with a pointer to Irving Goffman’s classic On Cooling the Mark Out. Which is the challenge facing any principled republicans who want to end this rather than drag out the now cancerously long con. On Cooling the Mark Out (Erving Goffman, 1952)

Footnote: irony and humor are the most enriching ways to alloy apparently self-certain assertions with enough uncertainty to make them not-corrupt. You will notice that corrupt people tend to use humor backwards: to inflate certainty. The laughs come easier but truths get harder.

Footnote 2: If you can’t/don’t do humor and irony, at least do those “epistemic status” nutritional labels like the earnest rationalists do.

Footnote 3: Sarcasm, mockery, amirite humor are all backwards-humor genres (inflate certainty rather than moderate it). Avoid.