kave's Shortform

Sometimes running to stand still is the right thing to do

It's nice when good stuff piles up into even more good stuff, but sometimes it doesn't:

• Sometimes people are worried that they will habituate to caffeine and lose any benefit from taking it.
• Most efforts to lose weight are only temporarily successful (unless using medicine or surgery).
• The hedonic treadmill model claims it’s hard to become durably happier.
• Productivity hacks tend to stop working.

These things are like Alice’s red queen’s race: always running to stay in the same place. But I think there’s a pretty big difference between running that keeps you exactly where you would have been if you hadn’t bothered, and running that either moves you a little way and then stops, or running that stops you moving in one direction.

I’m not sure what we should call such things, but one idea is hamster wheels for things that make no difference, bungee runs for things that let you move in a direction a bit but you have to keep running to stay there, and backwards escalators for things where you’re fighting to stay in the same place rather than moving in a direction (named for the grand international pastime of running down rising escalators).

I don't know which kind of thing is most common, but I like being able to ask which dynamic is at play. For example, I wonder if weight loss efforts are often more like backwards escalators than hamster wheels. People tend to get fatter as they get older. Maybe people who are trying (but failing) to lose weight are gaining weight more slowly than similar people who aren’t trying to do so?

Or my guess is that most people will have more energy than baseline if they take caffeine every day, even though any given dose will have less of an effect than taking the same amount of caffeine while being caffeine-naive, so they've bungee ran (done a bungee run?) a little way forward and that's as far as they'll go.

I am currently considering whether productivity hacks, which I’ve sworn off, are worth doing even though they only last for a little while. The extra, but finite, productivity could be worth it. (I think this would count as another bungee run).

I'd be interested to hear examples that fit within or break this taxonomy.

Suppose you are a government that thinks some policy will be good for your populace in aggregate over the long-term (that is, it's a Kaldor-Hicks improvement). For example, perhaps some tax reform you're excited about.

But this reform (we assume) is quite unpopular with a few people who would suffer concentrated losses. You're tempted to include in the policy a big cash transfer that makes those people happy (that is, making it closer to Pareto optimal). But you're worried about levering up too much on your guess that this is a good policy.

Here's one thing you can do. You auction securities (that is, tradeable assets) that pay off as follows: if you raise $X through auctioning off the securities, you are committed to the policy (including the big cash transfer) and the security converts into one that tracks something about how well your populace is doing (like a share of an index fund or something). If you raise less than that, the owner of the security gets back the money they spent on the asset.

Ignoring some annoying details like the operational costs of this scheme or the foregone interest while waiting for the security to activate a branch of the conditional, the value of that security (which should be equal to the price you paid for it, if you didn't capture any surplus) is just the value of the security it converts to.

(Solve $(\text{Probability(\$X is raised)}\times \text{Value of the security it converts to})$ + $\left(\right(1-\text{Probability(\$X is raised)})\times \text{Price you paid for it})$ = $\text{Price you paid for it}$)

So this scheme lets you raise the cash for your policy under exactly the conditions when the auction "thinks" the value of the security increases sufficiently. Which is kind of neat.