Prediction: The long and short of it
Antony Millner (University of California, Santa Barbara) and Daniel Heyen (ETH Zurich)
GPI Working Paper No. 7-2020, published in American Economic Journal: Microeconomics
Commentators often lament forecasters’ inability to provide precise predictions of the long-run behaviour of complex economic and physical systems. Yet their concerns often conflate the presence of substantial long-run uncertainty with the need for long-run predictability; short-run predictions can partially substitute for long-run predictions if decision-makers can adjust their activities over time. So what is the relative importance of short- and long-run predictability? We study this question in a model of rational dynamic adjustment to a changing environment. Even if adjustment costs, discount factors, and long-run uncertainty are large, short-run predictability can be much more important than long-run predictability.
Other working papers
Time discounting, consistency and special obligations: a defence of Robust Temporalism – Harry R. Lloyd (Yale University)
This paper defends the claim that mere temporal proximity always and without exception strengthens certain moral duties, including the duty to save – call this view Robust Temporalism. Although almost all other moral philosophers dismiss Robust Temporalism out of hand, I argue that it is prima facie intuitively plausible, and that it is analogous to a view about special obligations that many philosophers already accept…
In search of a biological crux for AI consciousness – Bradford Saad (Global Priorities Institute, University of Oxford)
Whether AI systems could be conscious is often thought to turn on whether consciousness is closely linked to biology. The rough thought is that if consciousness is closely linked to biology, then AI consciousness is impossible, and if consciousness is not closely linked to biology, then AI consciousness is possible—or, at any rate, it’s more likely to be possible. A clearer specification of the kind of link between consciousness and biology that is crucial for the possibility of AI consciousness would help organize inquiry into…
In defence of fanaticism – Hayden Wilkinson (Australian National University)
Consider a decision between: 1) a certainty of a moderately good outcome, such as one additional life saved; 2) a lottery which probably gives a worse outcome, but has a tiny probability of a far better outcome (perhaps trillions of blissful lives created). Which is morally better? Expected value theory (with a plausible axiology) judges (2) as better, no matter how tiny its probability of success. But this seems fanatical. So we may be tempted to abandon expected value theory…