3 ms·

To me, this comes back to the question of skin in the game. If you have skin in the game, then you produce the best uncertainty estimates you can (by any means)

• PeterisP 3y ago
  There are ways of scoring forecasts that reward accurate-and-certain forecasts in a manner where it's provably optimal to provide the most accurate estimates for your (un)certainty as you can.
  • bo1024 3y ago
    Yes, of course. I don't see that as very related to my point. For example, consider how 538 or The Economist predict elections. They might claim they'll use squared error or log score, but when it comes down to a big mistake, they'll blame it on factors outside their models.
    • eru 3y ago
      Well, but at least 538 has a reputation to defend as an accurate forecaster. So they have some skin in the game. (Of course, that's not as good as betting money.)
• hgomersall 3y ago
  It's worse than that. Oftentimes the skin in the game provides a motivation to mislead. C.f. most of the economics profession.
  • nequo 3y ago
    This is a pretty sweeping generalization, but if you have concrete examples to offer that support your claim, I’d be curious.
  • eru 3y ago
    How do economists have skin in the game? Many of them eg work in universities and some even have tenure. There's not much skin in the game between any forecasts they might make and their academic prospects. Economists working for companies often have to help them understand micro and macro-economics. Eg (some of) Google's economists help them design the ad auctions. It's relatively easy to figure out for Google how well those ad auctions work. So they certain have skin in the game. But: what motivation to mislead do those economists have?
    • hgomersall 3y ago
      Many economists are so fully bought into their models that they can't think of any alternatives, despite them being essentially useless. I interpreted skin-in-the-game in that way - as professionally committed. Perhaps something different was meant.
      • eru 3y ago
        > Many economists are so fully bought into their models [...] How do you know that? Whenever I interact with economists, mostly online via blogs but also sometimes via email, they always seem painfully aware of the shortcomings of their models, and don't seem to confuse them with reality. Perhaps you have studied a different sub-population of economists than the ones I have anecdotal experience with?
        • hgomersall 3y ago
          I'm a sense, that makes my point. Why do they persist with models that don't represent reality despite knowing it? Eventually you must realise that adding epicycles isn't going to cut it, yet still the sage voices echo the standard dogma when economies are dragged into the doldrums by policy posed by useless models. Bought into is not the same as believing.
          • eru 3y ago
            > Why do they persist with models that don't represent reality despite knowing it? Why do physicists ignore friction whenever possible? In general, for any task, you take the simplest model that represents the aspects of reality that you care about. But you stay aware of the limits. That's true in physics or engineering just as much as in economics. That's why NASA uses Newtonian mechanics for all their rocket science needs, even though they have heard of General Relativity. That's why people keep using models known to have limits. > [...] sage voices echo the standard dogma [...] You do know that most of published economics is about the limits of the 'standard dogma'? That's what gets you published. I often wish people would pay more attention to the orthodox basics, but confirming well-known rules isn't interesting enough for the journals. So if eg you can do some data digging and analysis that can show that maybe under this very specific circumstances restriction on free trade might perhaps increase national wealth, that can get you published. But the observation that most of the time free trade, even if the other guy has tariffs, is the optimal policy, is too boring to get published. Compare also crap like 'Capital in the Twenty-First Century' that catapults its author to stardom with its comparatively boring refutation by orthodox economists that no one cares about. > [...] dragged into the doldrums by policy posed by useless models. Most orthodox economics is pretty unanimous about basic policies: for free trade, against occupational licensing, for free migration, for free movement of capital, for simple taxes without loopholes, against messing with the currency, against corruption, against subsidies, for taxes instead of bans (eg on drugs, or emissions, or guns), against price floors or ceilings or other price controls, etc. Many doldrums happen when policy ignores or contradicts these basic ideas. Alas, economics 101 is not popular with the electorate almost anywhere.