A number of ideologies depend on a logical fallacy called a faulty generalization. It's probably the single biggest shortcoming of being human.
It's the classic tale of the old, blind men and the elephant. Each man touches a different part and describes the elephant as something entirely different, and none of them see the entire elephant for what it is.
Folks, we have to grow outside of the boundaries of our own individual selves in order to reach any sort of enlightenment. In order to do that, we have to abandon arguments from faith as well as from individual experience. I'm not saying that individual experience isn't important--it is--but only that it is the germ of a discussion, the beginnings of reasoning, not the end product.
Here's an example of one I heard from the Carly Fiorina / Barbara Boxer debate (2010) that sticks with me. When asked about her stance on abortion, Carly Fiorina replied that she was pro-life. The reason for her stance, she said, was that her husband's mother almost decided to have an abortion. Instead, she made the decision to keep the child, and it turned out just fine. The fallacy, of course, is the assumption that "it turned out just fine" could be universally applied to anyone pondering the decision of whether or not to have an abortion. It ignores the statistics outside of that one specific instance--her husband. It is also arguing from a position of privilege. If you are one of the lucky ones, then you can pretend the odds don't matter or that they are unimportant.
In a response to The Myth of the Enlightened Self-Interest, Part 2, Taliver brings up an important point: that the ideology of acting solely for self-interest (in a Tragedy of the Commons) is based on imperfect information. Any ideology that follows directly from imperfect information (e.g., based on blind faith in something) without allowing itself to adapt for new information (e.g., statistics, science) is condemning itself to eternal faulty generalization.
One example that has come to my attention lately is the "Austrian School" of economic theory, which should have died a long time ago but seems to have enjoyed a recent resurgence due to the Koch brothers and the Tea Party. Any school of thought that is based on a priori generalization is succumbing to the faulty generalization.
Tuesday, August 2, 2011
The Debt Ceiling and Multiple Payoff Games
First off, yeah, I know it's been a while (December--gads) since my last post here. It isn't that I haven't had anything to write about (got that double negative? Good.). Too many projects, never enough time. Anyway, I post here when I can and when it's relevant, not according to any specific schedule.
Folks may remember the series on "The Myth of the Enlightened Self Interest." (Part One) (Part Two) (Part Three). These were some of my most active posts, generating lots of very interesting discussion. Since I've posted those, obviously I've had plenty of time since then to dwell on some of the finer points and peoples' comments.
I've also had the opportunity to let multiple payoff game theory sink in as a concept and wrestle awake the sleeping snake of my rusty matrix math. For example, when Mordicai pondered the idea of a "greatest total payoff"--really what he means is sort of a Nash-equilibrium concept across all independent variables. A Nash^2 or Nash' equilibrium, if you will. It's a great way to reduce some games into a single payoff game. However, it should be obvious to anyone that not all games can be so easily reduced. In fact, the M. Zeleny [1974] paper proves this. Different players may have different value functions where one payoff may be exchanged with another. These value functions may be wholly non-linear. For example, you may want ice cream and to take a hot bath, but if you can only have one, sometimes you'd prefer to have neither.
As the debt ceiling debacle unfolded to its inevitable conclusion (and is still continuing to have grave consequences), it occurred to me that what has been plaguing Washington is an epic multiple payoff game that reduces down to a classic game of chicken. In our case, the variables are 1) the debt ceiling itself (and the budget), which forces all other variables to compromise, 2) partisan political power (Democrat, Republican, and Election 2012), and 3) political ideology (Tea Party). Unfortunately, both 2) and 3) are at odds with the principal 1).
The only solution in our matrix that reduces correctly to a long-term livable game requires a hold on 2) and completely dismissing 3). That solution requires restoring taxes to pre-Bush levels, reforming entitlements, and drastic spending cuts--something nonpartisan economists such as Alan Greenspan have been saying for years. Unfortunately, even if Washington doesn't get it, the rating agencies certainly do, as we will soon find out (I'm really hoping I'm wrong here, but unfortunately I'm probably right).
I plan to talk a bit more about ideology in my next post and how it is not only at odds with 1) and 2), but for now I'm going to punt and blithely assume that rationality trumps ideology.
Anyway, I considered writing out the multiple payoff matrix for this "dilemma" but decided to punt on that, too. I hate it when I'm lazy, but now the damage is already done and it wouldn't matter anyway.
The important thing? That multiple payoff game theory is quite possibly one of the most important areas of further study for the future and has real-world applications that we can use today. Time for Gort?
Folks may remember the series on "The Myth of the Enlightened Self Interest." (Part One) (Part Two) (Part Three). These were some of my most active posts, generating lots of very interesting discussion. Since I've posted those, obviously I've had plenty of time since then to dwell on some of the finer points and peoples' comments.
I've also had the opportunity to let multiple payoff game theory sink in as a concept and wrestle awake the sleeping snake of my rusty matrix math. For example, when Mordicai pondered the idea of a "greatest total payoff"--really what he means is sort of a Nash-equilibrium concept across all independent variables. A Nash^2 or Nash' equilibrium, if you will. It's a great way to reduce some games into a single payoff game. However, it should be obvious to anyone that not all games can be so easily reduced. In fact, the M. Zeleny [1974] paper proves this. Different players may have different value functions where one payoff may be exchanged with another. These value functions may be wholly non-linear. For example, you may want ice cream and to take a hot bath, but if you can only have one, sometimes you'd prefer to have neither.
As the debt ceiling debacle unfolded to its inevitable conclusion (and is still continuing to have grave consequences), it occurred to me that what has been plaguing Washington is an epic multiple payoff game that reduces down to a classic game of chicken. In our case, the variables are 1) the debt ceiling itself (and the budget), which forces all other variables to compromise, 2) partisan political power (Democrat, Republican, and Election 2012), and 3) political ideology (Tea Party). Unfortunately, both 2) and 3) are at odds with the principal 1).
The only solution in our matrix that reduces correctly to a long-term livable game requires a hold on 2) and completely dismissing 3). That solution requires restoring taxes to pre-Bush levels, reforming entitlements, and drastic spending cuts--something nonpartisan economists such as Alan Greenspan have been saying for years. Unfortunately, even if Washington doesn't get it, the rating agencies certainly do, as we will soon find out (I'm really hoping I'm wrong here, but unfortunately I'm probably right).
I plan to talk a bit more about ideology in my next post and how it is not only at odds with 1) and 2), but for now I'm going to punt and blithely assume that rationality trumps ideology.
Anyway, I considered writing out the multiple payoff matrix for this "dilemma" but decided to punt on that, too. I hate it when I'm lazy, but now the damage is already done and it wouldn't matter anyway.
The important thing? That multiple payoff game theory is quite possibly one of the most important areas of further study for the future and has real-world applications that we can use today. Time for Gort?
Wednesday, December 29, 2010
Prayer Is Actually Bad for You
Millions of dollars have gone into studying the effects of prayer. Most of this money comes from faith-based organizations such as the Templeton Foundation.
One interesting study actually shows that prayer is bad for you! Specifically, if a sick or injured person is being prayed for and they are aware of that activity, their chances of recovery diminish by as much as 7%.
This may seem a contradiction with previous studies that show a positive correlation between recovery and some form of personal prayer or meditation, but there is a key, subtle difference between praying and having someone pray for you. The former may only improve your chances, but the latter provides only a source of additional stress.
In other words: keep your faith to yourself!
One interesting study actually shows that prayer is bad for you! Specifically, if a sick or injured person is being prayed for and they are aware of that activity, their chances of recovery diminish by as much as 7%.
This may seem a contradiction with previous studies that show a positive correlation between recovery and some form of personal prayer or meditation, but there is a key, subtle difference between praying and having someone pray for you. The former may only improve your chances, but the latter provides only a source of additional stress.
In other words: keep your faith to yourself!
Friday, October 15, 2010
The Little Old Lady Experiment, Revisited
Back when I wrote about the Little Old Lady Experiment, some folks were a bit skeptical. Cynical, perhaps, or perhaps even correct. After all, in a personal account in Steven Pinker's The Blank Slate, a Montreal police strike on October 17, 1969 resulted in robberies, murders, and riots within hours [Video], dispelling the author's own personal belief in anarchism. It's hard to argue that our basic state is a moral one (not to mention what it says about a belief in anarchism and lack of authority as a sociological ideal).
And yet, how often is our world not one of violence, compared with the results of a single, specific event? How often do we prefer such a world to a world without violence?
Furthermore, the Little Old Lady Experiment was only formulated as a thought experiment. It's easy to dismiss something with a lack of evidence or empirical data to back it up. My only source was the "Bagel Man" in Freakonomics, after all. Such a queer title, indeed, makes it easy to toss it aside without further scrutiny.
But it turns out there have been similar studies. I was surprised to come across this mention in Richard Dawkins' The God Delusion:
These "ninety-seven percent" numbers refer to a series of trolley problems (in an interesting synchronicity, my previous post talks about trolley problems) and were conducted not only in Western culture, but in native Central American communities with culturally-appropriate substitutes.
Sadly, Mr. Hauser has very recently been accused of scientific misconduct related to falsifying data in another, unrelated study. Hopefully this does not discredit his earlier academic work or methods in general.
In another validation of what I have been blogging, it tickles me to read in The God Delusion that reciprocal altruism is very real in the biological world and that its language is "often expressed in the mathematical language of game theory," though sadly it still does not include multiple payoffs despite what I consider to be obvious ("The hunter needs a spear and the smith wants meat. The asymmetry brokers a deal").
Similarly, this study (pointed out by Mordicai) in the iterative two-person prisoner's dilemma raises attention to Dawkins' supposition that "mathematical models can be crafted to come up with special conditions under which group selection might be evolutionarily powerful" even if he thinks "these special conditions are usually unrealistic in nature." If the prisoner's dilemma itself is common among competing organisms, there is no reason to assume group selection would not unconsciously evolve as an emerging property among individual organisms, especially sexually reproducing ones (see also koinophilia in reference to the supporting paper).
And yet, how often is our world not one of violence, compared with the results of a single, specific event? How often do we prefer such a world to a world without violence?
Furthermore, the Little Old Lady Experiment was only formulated as a thought experiment. It's easy to dismiss something with a lack of evidence or empirical data to back it up. My only source was the "Bagel Man" in Freakonomics, after all. Such a queer title, indeed, makes it easy to toss it aside without further scrutiny.
But it turns out there have been similar studies. I was surprised to come across this mention in Richard Dawkins' The God Delusion:
The Harvard biologist Marc Hauser, in his book Moral Minds: How Nature Designed our Universal Sense of Right and Wrong, has enlarged upon a fruitful line of thought experiments originally suggested by moral philosophers.
...
The message of Hauser's book, to anticipate it in his own words, is this: 'Driving our moral judgments is a universal moral grammar, a faculty of the mind that evolved over millions of years to include a set of principles for building a range of possible moral systems. As with language, the principles that make up our moral grammar fly beneath the radar of our awareness.'
...
Ninety-seven per cent agreed that you should save the child...
...
Ninety-seven per cent of subjects agreed that it is morally forbidden...
These "ninety-seven percent" numbers refer to a series of trolley problems (in an interesting synchronicity, my previous post talks about trolley problems) and were conducted not only in Western culture, but in native Central American communities with culturally-appropriate substitutes.
Sadly, Mr. Hauser has very recently been accused of scientific misconduct related to falsifying data in another, unrelated study. Hopefully this does not discredit his earlier academic work or methods in general.
In another validation of what I have been blogging, it tickles me to read in The God Delusion that reciprocal altruism is very real in the biological world and that its language is "often expressed in the mathematical language of game theory," though sadly it still does not include multiple payoffs despite what I consider to be obvious ("The hunter needs a spear and the smith wants meat. The asymmetry brokers a deal").
Similarly, this study (pointed out by Mordicai) in the iterative two-person prisoner's dilemma raises attention to Dawkins' supposition that "mathematical models can be crafted to come up with special conditions under which group selection might be evolutionarily powerful" even if he thinks "these special conditions are usually unrealistic in nature." If the prisoner's dilemma itself is common among competing organisms, there is no reason to assume group selection would not unconsciously evolve as an emerging property among individual organisms, especially sexually reproducing ones (see also koinophilia in reference to the supporting paper).
Tuesday, October 5, 2010
Bias and Skepticism
Special thanks to Blogger for eating the first draft of this post. There is a special layer of hell reserved for people who like JavaScript.
A friend forwarded a link to an interesting blog post and a reference article [PDF]. While I find a few of the conclusions from the blog post a bit misleading, the original research article is thought-provoking. Simply put, the more we know about something, the more we are biased towards it. Our attitudes are only reinforced through knowledge. It shouldn't be a big surprise that we spend more energy in the realm of the familiar--as I've already discussed, conformity is the strength of inertia and it is impossible to rebel against everything. Our neurons work by forming associations between things, and that ability helps enable us to survive. It is impossible for us to be truly objective, since we are all human and are stuck with the apparatus of the human brain.
So, should we reach the same conclusion, that more knowledge can only hurt us? I find the notion a bit silly, because if that were the case, our attitudes would never change. What causes us to change our minds about things, if not knowledge and experience? Obviously the latter has more weight than the former, but we don't always have to experience jumping off a cliff in order to know that it may be bad for us. Also, I don't find it unhealthy to put faith in experts. The converse--putting idiots in charge of things--is simply dangerous.
One of my objectives in starting this blog is to promote what I call "healthy skepticism." This is "healthy" in the sense that it doesn't mean to blindly question everything (until you end up in subjective reality / conspiracy theory / Philip K. Dick space), but to question enough in order to possibly reform attitudes and be open to new information that becomes available. It means admitting when I may have been wrong or less informed about something at a prior time, which can be a difficult thing, especially for a stubborn guy like me.
Part of healthy skepticism involves becoming aware of logical fallacies. This is especially important when reaching ethical positions (such as my position post on homosexuality). Another part of healthy skepticism is to question my interior monologue--what is my real purpose behind a particular ethical position? Is it about something that benefits me personally, or something much larger than myself? Like anyone, I appreciate peer acceptance, but I do find it less important than arriving at the objective truth (contrast Nite Owl with Rorschach in Watchmen). I also recognize that the objective truth is much larger than my own capabilities and requires a collective input--and a diversity of opinions.
A friend forwarded a link to an interesting blog post and a reference article [PDF]. While I find a few of the conclusions from the blog post a bit misleading, the original research article is thought-provoking. Simply put, the more we know about something, the more we are biased towards it. Our attitudes are only reinforced through knowledge. It shouldn't be a big surprise that we spend more energy in the realm of the familiar--as I've already discussed, conformity is the strength of inertia and it is impossible to rebel against everything. Our neurons work by forming associations between things, and that ability helps enable us to survive. It is impossible for us to be truly objective, since we are all human and are stuck with the apparatus of the human brain.
So, should we reach the same conclusion, that more knowledge can only hurt us? I find the notion a bit silly, because if that were the case, our attitudes would never change. What causes us to change our minds about things, if not knowledge and experience? Obviously the latter has more weight than the former, but we don't always have to experience jumping off a cliff in order to know that it may be bad for us. Also, I don't find it unhealthy to put faith in experts. The converse--putting idiots in charge of things--is simply dangerous.
One of my objectives in starting this blog is to promote what I call "healthy skepticism." This is "healthy" in the sense that it doesn't mean to blindly question everything (until you end up in subjective reality / conspiracy theory / Philip K. Dick space), but to question enough in order to possibly reform attitudes and be open to new information that becomes available. It means admitting when I may have been wrong or less informed about something at a prior time, which can be a difficult thing, especially for a stubborn guy like me.
Part of healthy skepticism involves becoming aware of logical fallacies. This is especially important when reaching ethical positions (such as my position post on homosexuality). Another part of healthy skepticism is to question my interior monologue--what is my real purpose behind a particular ethical position? Is it about something that benefits me personally, or something much larger than myself? Like anyone, I appreciate peer acceptance, but I do find it less important than arriving at the objective truth (contrast Nite Owl with Rorschach in Watchmen). I also recognize that the objective truth is much larger than my own capabilities and requires a collective input--and a diversity of opinions.
Friday, September 24, 2010
The Kill Whitey Problem
My friend Matt, in his blog, posted a link to an interest article about the Trolley Problem. Simply put, the experiment shows that we like to think of ourselves as having absolute morals, but, in practice, we have social biases and different value sets that cause us to be more consequentialist that we would like to believe. In other words, though we may like to think the end does not justify the means--we often, even without thinking, will behave as if it does.
For those of us who like Battlestar Galactica, we may recognize the Trolley Problem as similar to the scenario with Lee "Apollo" Adama and the Olympic Carrier in the first episode of the first season, "33". In order to save the fleet (tens of thousands), he is ordered to destroy a ship containing hundreds. The decision is a hard one, but it has to be made and in a very short amount of time (a similar situation occurs in the Pilot Episode with Colonel Tigh and an engineering deck that has to be shut down). Decide: you have to quickly choose between killing group X or group Y! Mind you, in each of these situations in Battlestar Galactica, it's a more obvious choice because group X is a subset of group Y--kill a few, or everybody dies.
One interesting objection to the Trolley Experiment is that the obligation to participate. Forcing someone to make the choice (a "mad philosopher" as the experiment likes to use) is the real immorality, not the actual choice. When we are forced to choose, however, the way we make those decisions can be interesting. The Kill Whitey experiment shows that our biases come into play whether we are liberals or conservatives (Chip Ellsworth III--what an asshole!)--in the case of the former, guilt, and in the case of the latter, fear of a black planet.
No surprise, we make choices according to our value systems--and this is abundantly clear when especially pressured to make a choice. The greater the pressure, the more we will flock to the polar extremes.
I'd like to hope that the Gort project could yield some successful fruit. If we could, say, successfully model our ethical systems and run them through different experiments. People who live in war zones, areas of famine or corruption, or under great authoritarian pressure or stress, may have to live through iterative Trolley Experiments each and every day. For those of us in the privileged world, we don't have to even think about it until a September 11 happens--and when it does, we tend to be less prepared to make good decisions as a result. When is war "the right thing to do"? To what extent can you hold people accountable for making bad decisions? To what degree can you blame anyone for having "blind spots" in their thinking if they are in the throes of a Trolley Experiment?
For those of us who like Battlestar Galactica, we may recognize the Trolley Problem as similar to the scenario with Lee "Apollo" Adama and the Olympic Carrier in the first episode of the first season, "33". In order to save the fleet (tens of thousands), he is ordered to destroy a ship containing hundreds. The decision is a hard one, but it has to be made and in a very short amount of time (a similar situation occurs in the Pilot Episode with Colonel Tigh and an engineering deck that has to be shut down). Decide: you have to quickly choose between killing group X or group Y! Mind you, in each of these situations in Battlestar Galactica, it's a more obvious choice because group X is a subset of group Y--kill a few, or everybody dies.
One interesting objection to the Trolley Experiment is that the obligation to participate. Forcing someone to make the choice (a "mad philosopher" as the experiment likes to use) is the real immorality, not the actual choice. When we are forced to choose, however, the way we make those decisions can be interesting. The Kill Whitey experiment shows that our biases come into play whether we are liberals or conservatives (Chip Ellsworth III--what an asshole!)--in the case of the former, guilt, and in the case of the latter, fear of a black planet.
No surprise, we make choices according to our value systems--and this is abundantly clear when especially pressured to make a choice. The greater the pressure, the more we will flock to the polar extremes.
I'd like to hope that the Gort project could yield some successful fruit. If we could, say, successfully model our ethical systems and run them through different experiments. People who live in war zones, areas of famine or corruption, or under great authoritarian pressure or stress, may have to live through iterative Trolley Experiments each and every day. For those of us in the privileged world, we don't have to even think about it until a September 11 happens--and when it does, we tend to be less prepared to make good decisions as a result. When is war "the right thing to do"? To what extent can you hold people accountable for making bad decisions? To what degree can you blame anyone for having "blind spots" in their thinking if they are in the throes of a Trolley Experiment?
Wednesday, September 22, 2010
Klaatu Barada Nikto!
In the movie The Day the Earth Stood Still (sorry, Keanu, there is still only one version of this movie), the alien Klaatu, who suspiciously looks a lot like a human actor named Michael Rennie, trusts the heroine of film to say the magic words "Klaatu barada nikto" in order to save the people of our planet from destruction. The film is an apt metaphor for fear of the unknown, our self-destructive and violent tendencies, and our ability to prejudge. In the context of the film, the robot Gort acts as an overseer and enforcer. Since we are so flawed, Klaatu's people built Gort and his like to keep us in check.
At the conclusion of my last three posts, I have proposed the concept of a multiple payoff game and the notion of a computer model or simulation whose purpose (unlike Gort, whose real purpose is to enforce--something that would be truly too dangerous to build) is to help us better understand the trade-offs and costs when exchanging one value for another. Note that the language of multiple payoff games includes stochastic (random / probability) variables as well as well understood, deterministic ones. I have also mentioned that, according to Sudipta Sarangi, such a model could not be used as an accurate predictor of events (no one has a crystal ball), but as a way for us to be able to understand the long reaching consequences of value choices.
It may sound like science fiction or technological gobbletygook, but these exact kinds of models are already being done by banks. We already have multiple payoff models. We like to think of the free market and business as being measured in terms of dollar bills, but the U. S. dollar (USD) is only one currency in a vast exchange that includes many currencies (GBP, AUD, EUR, etc.), commodities (gold, oil, pork bellies, etc.), equities (stocks), options and futures (the contract to buy or sell something at a specific price), loans (commercial paper, corporate loans, mortgages, government bonds, municipal bonds, etc.), and derivatives (insurance contracts such as CDS, structured products such as CMOs, etc.).
Each bank has its own private model of the financial world, and each bank keeps its methods secret, hoping to use it to its own financial benefit. And yet, these models, which are part of what we call capitalism today, are absent of our other human values. For all of their risk analysis, the payoff is still in terms of a single pure net gain. If a bank has lots of USD and inflation risk is high, it performs a currency swap and expresses its wealth in another currency. The collapsed Lehman Brothers, for instance, came under ethical fire for its Repo 105 tactic--taking a portion of its loss and "lending it out" overseas to be bought back later at 5 percent interest, removing it successfully from their balance sheet. It's a bit like Bill and Ted's Excellent Adventure, where the time-traveling protagonists realize that, while they don't have time to do all they need to do, they have time after they succeed to come back and fix it (so long as they remember to).
Most of us are unaware that these kinds of multiple payoff games exist. We think in terms of dollars, because that is how we get paid. We don't stop to think, "what if the same dollar tomorrow won't buy us the same loaf of bread?" Unless we travel or do business in England, chances are that we never trade in "cable." And many of us don't have the foggiest idea why we would ever want to buy a credit default swap--unless we are following the media's version of the credit crisis and thinking of it the bane of all evil (though it has a very legitimate role).
While many of the holes in banking have been plugged through legislation that got mostly unnoticed this year (due to more sensationalistic news, such as the Tea Party and Lady Gaga), the essence of banking is still there and the mathematics behind examining multiple payoffs is still the same (positioning and risk).
My approach is to adopt the same economic models that banks use, but adapt them to include new variables. Carbon emissions is an easy to quantify example, but the Gini coefficient (economic "fairness"), political instability, etc., all play roles in the model. It is not that different an idea than what technologies such as Palantir have attempted to do, only in a more public way.
At the conclusion of my last three posts, I have proposed the concept of a multiple payoff game and the notion of a computer model or simulation whose purpose (unlike Gort, whose real purpose is to enforce--something that would be truly too dangerous to build) is to help us better understand the trade-offs and costs when exchanging one value for another. Note that the language of multiple payoff games includes stochastic (random / probability) variables as well as well understood, deterministic ones. I have also mentioned that, according to Sudipta Sarangi, such a model could not be used as an accurate predictor of events (no one has a crystal ball), but as a way for us to be able to understand the long reaching consequences of value choices.
It may sound like science fiction or technological gobbletygook, but these exact kinds of models are already being done by banks. We already have multiple payoff models. We like to think of the free market and business as being measured in terms of dollar bills, but the U. S. dollar (USD) is only one currency in a vast exchange that includes many currencies (GBP, AUD, EUR, etc.), commodities (gold, oil, pork bellies, etc.), equities (stocks), options and futures (the contract to buy or sell something at a specific price), loans (commercial paper, corporate loans, mortgages, government bonds, municipal bonds, etc.), and derivatives (insurance contracts such as CDS, structured products such as CMOs, etc.).
Each bank has its own private model of the financial world, and each bank keeps its methods secret, hoping to use it to its own financial benefit. And yet, these models, which are part of what we call capitalism today, are absent of our other human values. For all of their risk analysis, the payoff is still in terms of a single pure net gain. If a bank has lots of USD and inflation risk is high, it performs a currency swap and expresses its wealth in another currency. The collapsed Lehman Brothers, for instance, came under ethical fire for its Repo 105 tactic--taking a portion of its loss and "lending it out" overseas to be bought back later at 5 percent interest, removing it successfully from their balance sheet. It's a bit like Bill and Ted's Excellent Adventure, where the time-traveling protagonists realize that, while they don't have time to do all they need to do, they have time after they succeed to come back and fix it (so long as they remember to).
Most of us are unaware that these kinds of multiple payoff games exist. We think in terms of dollars, because that is how we get paid. We don't stop to think, "what if the same dollar tomorrow won't buy us the same loaf of bread?" Unless we travel or do business in England, chances are that we never trade in "cable." And many of us don't have the foggiest idea why we would ever want to buy a credit default swap--unless we are following the media's version of the credit crisis and thinking of it the bane of all evil (though it has a very legitimate role).
While many of the holes in banking have been plugged through legislation that got mostly unnoticed this year (due to more sensationalistic news, such as the Tea Party and Lady Gaga), the essence of banking is still there and the mathematics behind examining multiple payoffs is still the same (positioning and risk).
My approach is to adopt the same economic models that banks use, but adapt them to include new variables. Carbon emissions is an easy to quantify example, but the Gini coefficient (economic "fairness"), political instability, etc., all play roles in the model. It is not that different an idea than what technologies such as Palantir have attempted to do, only in a more public way.
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