Post discussion with an STM.

Introduction

Goal is to come to the best answer we can with the resources we have at hand.

Example application of Bayes theorem

Let’s say there is a system in front of you and you have no idea how to operate it, neither are there instructions, what would you do? You would give some inputs and see what outputs happen. Bayes theorem I am informed is a much better way to proceed with determining what needs to be done. Let us understand it with the following example:

Say there a 8 worlds. Each world has its own rules. You wan’t to determine which world you are in. The 8 worlds are characterized by an outcome from three coin tosses. When we toss a coin 3 times we get about 8 outcomes. Each outcome uniquely characterizing one world. In world 1, an outcome of HHH (Head Head Head) is expected. In world 2, an outcome of HHT is expected. And HTH, THH, HTT, THT,TTH,TTT in the other worlds.

Given the task of determining which world we are in currently, we are provided with a coin. At this moment we have no clue as to which world we are in. Our confidence on us being in each of the worlds is 12.5 %.

The first coin is tossed. We get Heads. This means that we are not in worlds based on, TTT, for example. Immediately our confidence in HHH, HHT, HTH, HTT, goes up to 25% and the confidence in the other worlds pretty much goes to 0. Next we get another heads. Our confidence in HHH,HHT,THH goes up to 33.3% and the rest goes to 0. Next we get another heads, confidence on HHH reaches 100% and we have thus determined the world we live in by using the Bayes theorem.

Determining our value system

Currently we don’t know our true value system (the actual reality). We have some ideas about what it can be, as a result of feelings and existing biases. Our current Value System needs an update as it currently has equal confidence on many hypotheses. There is a system in front of you and you have no idea how it works, neither are there instructions, what would you do?

Make a couple of hypotheses. You observe the outcomes for certain inputs. Update confidence level on each hypothesis.

Observation An ‘open-ended question format’ study by William H. Desvousges et. al, was done where 1200 subjects were asked how much money they were willing to pay to save migrating birds from drowning in uncovered oil ponds by covering the oil ponds with nets, taking into account their household income. Different set of subjects (~400/set) were asked how much money they would pay for 2000 or 20,000 or 200,000 birds. Subjects between different sets, are spanned in such a manner that every set has similar # of subjects (Table 3-5) from different age groups, different educations, gender, race and income too! The study conducted was impressively meticulous. Outliers and anomalies are justified for and discarded as explained in Table 3-6. About 70 % of the data is usable. The Mean value of the willingness to pay (WTP) was 80$, 78$ and 88$ respectively. The median with all different sets was 25$. The standard deviation was 187, 132, 166 respectively. The best graphic of all is below, which shows the WTP vs # of people in a particular WTP slab.

What I see seems to be correlation. All the above observations and meticulousness of data, quickly remove ones ability to question the data. The point is to keep a whole lot of variables constant and just vary one variable. BAM!

As a last straw this was the question asked:

Keeping these factors in mind, what is the most that your household would agree to pay each year in higher prices for wire-net covers to prevent about 2,000 (or 20,000 or 200,000 depending on the version) migratory waterfowl from dying each year in waste oil holding ponds in the Central Flyway?

The whole study seems to not make sense, as no one contributed actual money. How can we take these values to be real!

In practice, some researchers favor the direct approach, asking consumers directly to state their WTP for a specific product through, for example, an open-ended (OE) question format. Others prefer an indirect approach, such as choice-based conjoint (CBC) analysis, in which WTP is calculated on the basis of consumers’ choices among several product alternatives and a “none” choice option. However, neither method is foolproof. Many studies have shown that both direct and indirect approaches can generate inaccurate results for various psychological and technical reasons. More fundamentally, both approaches measure consumers’ hypothetical, rather than actual, WTP and thus can generate hypothetical bias, which the economics literature defines as the bias induced by the hypothetical nature of a task.-[wiki][WTP]

Further more, in the conclusion of the study explained in the observation, the author says,

We are concerned, however, that currently available estimates of these values are not reliable enough to be used in a damage assessment. Some argue that these values are predominantly ethical or moral in nature and cannot be monetized in a meaningful way. However, if nonuse damages are determined to be separately compensable, compensation should be based on actual amounts people would pay for these kinds of services.-from the study

It appears to me that the author is also saying that we should use actual payments, instead of WTP’s.

For now I shall go past this. As this seems to be taking me away from the actual goal. I assume for now that the study is representative of the world.

Hypothesis #1

~80$ is the mean amount anyone would pay whether they can save 2,000 , 20,000 or 200,000 birds. It appears that there is no relationship between the number of birds you save and WTP.

Hypothesis: Humans care for all birds, not just the first 2000. It’s because of messed up brain that they don’t see it.

Looking at the observation it might appear that Humans wanted to save only 2000 birds. I think this is the wrong inference because, in all probability, a lesser number of birds (than 2000) might still have churned out the same mean 80$. An inference that the amount one pays has no or little relationship with the number of birds they will be saving seems right, as this type of scope neglect is observed in many other cases.

We are insensitive to scope even when human lives are at stake: Increasing the alleged risk of chlorinated drinking water from 0.004 to 2.43 annual deaths per 1000 - a factor of 600 - increased willingness-to-pay from $3.78 to $15.23. Baron and Greene found no effect from varying lives saved by a factor of 10.
-Eliezer in his blog on scope insensitivity

Some of the humans were willing to pay about 80 $ to save random birds they have never met. It’s quite some money. They probably wanted to spare those creatures from pain.

They probably visualized a single bird, drenched in oil, unable to escape.-Eliezer in his blog on scope insensitivity

Maybe humans attached money value to the question based on this image? This seems to explain why they continued to pay $80 irrespective of the number of birds.

Humans are not able to imagine/visualize/understand large numbers such as 2,000, 20,000 etc. It appears that we don’t understand large numbers in general. For example, if someone said that his head had 10,000/ 100,000 hairs, it wouldn’t make a difference. Or for that matter, if someone asked for donations to save 2,000 birds or 20,000. We seem to connect better with one, two, thirty or a few more than that. But above that it’s just a blur!

Could this be that we came from an evolved brain capable of understanding small group dynamics. If for example 10 people in a tribe of 40 died, then I am feel that I am going to panic. And when fucking millions and millions of people die, out of a billion people and pretty far away, I am somehow stone cold (steve-austin ;).

Summary
In total we seem to have formed a couple of hypotheses.

1) Evolutionary hardwiring is reason for lack of understanding large numbers. 
2) We visualize based on our capability, something small (one bird in black oil struggling to get free), and make decisions based on that instead of shutting up and multiplying.
3) Evolutionary hardwiring prohibits us from visualizing large numbers. This somehow results in us using other things based on our capability to make decisions, instead of shutting up and multiplying.

Hypothesis #2

Hypothesis: Humans care for no birds, not just every bird after 2000. It’s because of the messed up brain that they don’t see it.

Why were they willing to pay 80$ to begin with, if they didn’t care about it? Why were people emotionally stressed that birds were in pain in the first place?

Some people paid and some people did not. Why were 83% of the usable data (70% of 1200 subjects) willing to pay money for something they absolutely don’t care about.

Could it be that they paid because there was some sort of social pressure? Seems unlikely. The question follows as, social pressure from where or what? I find it very unlikely that 83% of the people would donate to anything just because they were asked a question in an intimidating way or by a beautiful girl or because their family would look down on them. If that is the case shouldn’t it be reproducible in other study’s where we have WTP’s? I assume for now that this is trivial, unless alarm is raised by my reviewers/readers. I assume that the author would have definitely taken measures to overcome this, if any.

In order to determine the values of a system, we need to give inputs and see outputs. If we are not going to use the system at all, we are not going to be able to do anything. Input is people asking you for your WTP for birds that will suffer, output is 83% of the usable data (70% of 1200 subjects) showing their WTP. I suspect my value system wants otherwise than proposed in the hypothesis.

For the sake of counter-argument, I propose using the same logic on another piece of information. If 83% of the usable data (which I suspect it is) points that humans are consumeristic , does that mean that it is part of the value system to buy? If 83% of the population wants to fund terroristic activities, does that mean that it is part of the true value system?

Regarding buying, I guess we can say that, in the days of us being in small tribes, I can’t imagine buying fancy products featuring in the value system. My point is that maybe this is a new age invention and for some reason we bought into this whole buying thing, with the belief that it somehow will make our life better. We know from Martin Seligmans TED talk that this is probably a pleasurable task and it will not last long. In other words, it appears that people are probably being misled and there is no reason to get into a fully consumeristic lifestyle, with the belief that it is part of your true value system.

Regarding terrorism, I am not sure there will ever be a point that for me, where I will support it even if the popular vote falls on it, as there seems to be another special clause. I am not sure if we discussed it in the Solution inside your head. The point is any solution proposed to me, that is not part of the solution inside my head, will not be accepted at any cost. Imagine 83% of the world saying that they are willing to smash the head of a baby. I would ask them to go fuck off. The logic just doesn’t matter anymore.

To sum up, it seems like we can get clues from populous vote. It appears that it can only give a partial direction in which we might need to go in, owing to biases. The populous vote, needs to be approved by the solution inside your head. The populous vote, needs to hold to up to stringent interrogation.

But we are meat eaters. We have always been meat eaters! Maybe it was never meant to be part of the value system.

We observe some meat eaters don’t like the idea of the torture that animals or birds undergo. Some go to the extent of buying products that allow humane treatment of birds/animals. Some go full retard, VEGAN. It’s not like we have no food and are struggling to survive. We are living comfortable lives. Some of the animals/ birds have also been domesticated, despite being meat eaters. What was that about? What if we can provide humane treatment for the bird/animal and also go on to still be a meat eater? Because now we can! Previously we needed food, anything that we could get our hands on was for survival, but now, its different. We can take a small bump on the road. We are better!

What does your value system want again?

Could it be that I am just fitting data to the hypothesis that I want to win?

Summary In total we seem to have formed a couple of hypotheses. 1) If 83% of the usable data had a WTP > 0 then it implies that we care for birds. 2) I am fitting data to the hypothesis I want to win 3) I have always been a meat eater, Hence I don’t give a shit about birds. They are tasty. Period!

Open issues

What is the number that we use to jump from side of the boat to the other? What if it is 50%.

WTP or actual payment, which takes us to our Value system and why?

Continue with other hypothesis…

William H. Desvousges, F. Reed Johnson, Richard W. Dunford,Kevin J. Boyle, Sara P. Hudson, and K. Nicole Wilson, “Measuring Nonuse Damages Using Contingent Valuation: An Experimental Evaluation of Accuracy” 1992