I haven’t heard that statistic before. And the formulation seems imprecise? Does continuously beating the market mean that every single minute your portfolio value gains relative to the market?
I didn't realize "Juneteenth" was considered "Black-sounding" by some people. Juneteenth is a pretty culturally mainstream term (being a national holiday). And forming new words using contractions doesn't seem like a typically Black-person thing to do.
I associate the term with Black people, not because of how it sounds, but because I know what it means and know about it's origin among formerly-enslaved Black communities.
Maybe you mainly heard it said by black people, so it just sounds black to you? Whereas someone who heard about it on Twitter in 2015 wouldn't have made the same subconscious association, even if it's explicitly about celebrating freeing black people from slavery.
Oh, no. It sounds black because it is black. Check the history. "Juneteenth" the term was absolutely invented by black folks. I'm just finding it interesting that it "doesn't sound black to others."
I mean, I know that. I'm thinking of why it doesn't "sound black" to others but it does to you. Words are just words. They don't have inherent qualities that can't change or are the same to those who haven't heard the word before.
Yeah, I mean I know this can be a feather-ruffling point but (esp at my age) there's something wild about the Black slang -> "mainstream cool" slang pipeline that's ubiquitous and feels instant. :)
Author here. @sokoloff also pointed this out in their comment. You are right, the example confuses by making the group sizes different.
I will update the article so it reads like this:
Ten wealthy art patrons each contribute €1,000,000 to the local public art museum.
Total Contributions: 10×€1,000,000=€10,000,000
QF allocates: (10×sqrt(1,000,000))²=€100,000,000
Subsidy: €90,000,000
Ten lower‑income individuals each contribute €100 to replace lead pipes in their neighborhood
Total Contributions: 10×€100=€1,000
QF allocates: (10×sqrt(100))²=€10,000
Subsidy: €9,000.
Here, both groups get their contributions multiplied 10x. But the high-income group gets 10,000x the subsidy.
Given the assumption of wealth equality (and other assumptions), the QF paper proves that allocating more money to art maximizes social welfare, because if people contribute more to the art, it means art it has more utility.
But given the reality of wealth inequality, and the theory of diminishing marginal utility of wealth, the wealthy may contribute more to art simply because they can afford it, and because 1,000,000 may not have any more utility to them than 100 has to a very poor person.
"the example confuses by making the group sizes different"
But isn't that also realistic, since there a lot more people with little income and "small" problems than ultra-wealthy potential art patrons?
Today, if I get 1000 people to give $10 to the local library or public sport place, I have $10.000.
(1000xsqrt(10))² are $10.000.000.
For me, an obvious fix for potential exploitation would be to cap the individual contribution to 10k or 100k.
However, as I said I know nothing about qf and this has prob. already been discussed to death.
The authors of the QF paper describe it as "an extension of the logic of quadratic voting." They involve similar formulas and both are theoretically optimal (or efficient), and have a single equilibrium. These properties are proven using somewhat similar math.
But they apply to quite different settings and are not really the same thing. With Quadratic Voting, people pay for votes (with cost determined by a certain formula). With Quadratic Funding, people contribute to projects (with matching funds determined by a certain formula).
QV also makes many assumptions that rarely hold in reality, just like QF does. I may write an article about this someday.
What straw man? The assumptions underlying the theory of QF are spelled out cleanly in the original QF paper. The article is just enumerating these assumptions and showing they don't hold in reality.
The numbers in the example are indeed impossible to measure. But QF is claiming *optimality* -- that it maximizes social welfare -- when certain assumptions hold. To show that QF does not maximize social welfare when these assumptions don't hold, it suffices to show a single hypothetical counterexample.
I don't hold any cards in the game - if QF is bollocks, so be it, I couldn't care less.
The reasons why I've commented are:
1) the article does a really bad job at using words that matter to me, like "utility". If any theory – QF or OPs own line of thought – tells me that funding cancer research doesn't have utility for the person funding it, that theory is BS. I don't need a badly made up hypothetical counterexample for this.
2) The author contradicts themselves: "QF assumes that all utility is direct utility, benefiting the contributor only." – but then they go on and calculate the utility of spending money on saving lives not based on the utility of the contributors, because "that’s not the kind of utility we’re trying to maximize" (btw, who is "we"!?), but based on some arbitrary made-up value and number of saved lives.
Actually, everything you complain about is highly irrelevant. It can't be overstated how irrelevant your objection is.
> (other than feeling good about those lives being saved, but that’s not the kind of utility we’re trying to maximize).
Your interpretation of this statement is that the contributors have a fixed marginal utility for every single dollar, so that they will consider the situation where they spend $1,000,000 per live saved to be superior to the situation where they spend $100,000. In other words, you're saying that welfare is a veblen good for the donor.
The author makes the argument that the mere act of spending more money to save lives is not the type of utility we should strive for to maximize social welfare.
Your utility in question is not about feeling good about saving people regardless of cost, it's about feeling good about saving people, precisely because it costs money and you personally spent money to do it.
By the way, why is that "your utility"? Why am I putting words in your mouth? Because you're disagreeing with the author and therefore necessarily put yourself at odds with the authors objection to the first interpretation. Hence you must necessarily agree with it, otherwise you're just trolling and that would be uncharitable of me to accuse you of. So, yes, you must have mistakenly chosen the silly interpretation.
I think I disagree with nkmnz' specifics. But I'm not sure! It's possible I might agree with nkmnz across the board.
This might be a case where someone familiar with the subject could follow what you're saying just fine, but most of us HN commenters don't know enough about the subject to get it. That can happen here (e.g. on physics topics). In any case I can't really follow your arguments closely.
> Pillaging these funds seems like it's almost a trivial endeavor assuming
It is, and in fact the authors point this out in the original paper:
"…if the size of this group is greater than 1/α and the group can perfectly coordinate, there is no limit (other than the budget) to how much it can steal."
> I have to say that the biggest flaw I see isn't theoretical, it's practical.
Exactly. The theory is fine -- given all these assumptions hold. In practice, these assumption don't hold.
For example, one of the assumptions is absence of sybil attacks, fraud, or collusion. Obviously, these assumptions may not hold.
You can defend against sybil attacks in various ways. But how do you stop people from colluding (e.g. I $10 to 1000 friends, tell them they can keep $5 if they contribute $5 to my project)? There are collusion-resistant forms of quadratic funding, such as COCM, but these do not have the desirable theoretical properties (such as optimality) that vanilla QF has.
It's funny that a cooky proposal originating from crypto, which is incredibly inefficient precisely because it has to defend against sybil attacks (unlike permissioned systems), assumes the absence of sybil attacks. Hilarious, really.
> accepting the social and individual utility of enjoying the arts, but denying any such utility for enjoying the saved lives
But in the part of the article you quoted above, the author (me) specifically acknowledges the utility of enjoying saved lives. But this is a critique of the quadratic funding mechanism, which is a public goods funding mechanism meant to maximize the utility each individual independently derives from enjoying public good.
The whole point of the article is to critique this assumption -- to point out that people's motives are sometimes altruistic (they derive utility just from knowing other people benefit), but the optimality of QF assumes this vicarious utility does not exist. As the article states "When individuals make contributions for purely altruistic reasons, they don’t directly experience the utility themselves. And yet the optimality of QF assumes that all utility is direct utility, benefiting the contributor only."
Thank you for replying to my critique! The whole point of me reading your text was not to critique your assumptions, but to understand your arguments. It would be great if you'd do the same: make understanding the whole point of your thought, not criticizing.
I'm willing to accept this statement of your's about QF as correct: "QF assumes that all utility is direct utility, benefiting the contributor only."
This still does not exclude the utility of saving lives for the savior. If the act of saving a live is worth 10m units of currency to me, the utility that I derive must be at least 10m units of currency. This is the "direct utility benefiting the contributor"! You cannot claim that QF cares only about direct utility of the contributor, but then go on and set that direct utility to 0, claiming QF didn't care about it.
If you value saving lives at a rate of $100,000 worth of utility and a cost of $100,000, then quadratic funding makes you [0] pay $150,000 of money for $100,000 worth of utility.
Make sure to carefully read articles before dismissing them twice. Thank you.
[0] you = your contribution + a magical subsidy (presumably paid by you indirectly)
The problem with the article is that they did not make the point you are conveying here.
They say:
1. QF cares only about direct utility
2. $saving a life brings $100,000 of INdirect utility for society and/or the person who's life is saved
3. we (again: who?!) don't care about the direct utility in this case
I have no idea how you can wrap your head around the idea that this is a good representation of any valid critique.
Btw, I think QF is stupid, but that's not the point here.
What an uncharitable reply. Not op, but you seem to miss the basic point of the article, I.e. you fail at your own criterion of making understanding your goal.
As someone not in this space I found the argument succinct and easy to follow. QF is optimal if you only have direct utility. To illustrate that this assumption is problematic, confront it with a hypothetical where direct utility is zero. Then you can clearly and immediately see that in this hypothetical it's not optimal.
Maybe the argument is hard to parse if you're not used to reading theoretical literature?
But OP did not follow his own terms: he refuses to take the direct utility of giving your money to charity into account and instead calculates some arbitrary utility of the saved lives, which is indirect utility.
Do you have any evidence that these supposed assumptions exist?
No one donates $100K to the opera because they enjoy attending opera $1M worth. It's absurd to accuse any opera organization of assuming that.
Someone buys a ticket to the opera for $100 because they enjoy attending opera >$100 worth. They donate $100K because they want other people to enjoy opera, or for personal advertising purposes, not charitable social purposes.
I don't think the author was claiming that significant number of people hold those assumptions. I thought the assumption was that the most people implementing QF believe that QF is optimal for their use case. However, the author's observed use cases tend to not match the preconditions for QF's optimality.
QF makes assumptions like this, but it's not because the authors assume these assumptions reflect reality. They are just simplifying assumptions that allow formal proof of properties like optimality.
Also this article is explicitly challenging these assumptions.
I’m reading a winking, ironic acknowledgement from the authors that the mathematical definition of individual utility may not map perfectly onto the psychology of a patron of the arts.
> They are just simplifying assumptions that allow formal proof of properties like optimality.
And when they're done, the proofs are recognized as being fully out of touch with with the reality we actually live in based on the fact that their assumptions are also out of touch, and nobody actually tries to use them to make decisions about how to do things in our very real and non-simplified society?
Yes, as you (sarcastically) imply people do indeed try to use QF to make actual decisions, not recognizing the proofs are based on assumptions that don't match reality.
There's nothing wrong with making proofs based on simplifying assumptions. A lot of incremental progress is made that way. The problem is not the QF theory, it is that people are using QF in the real world because they think it has all these great theoretical properties in the real world -- not recognizing that the underlying assumptions are unrealistic.
https://thesocietypages.org/socimages/2008/02/06/correlation...
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