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ThomasSittler comments on Comparative advantage in the talent market - Effective Altruism Forum

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Comment author: [deleted] 13 April 2018 07:02:58AM *  3 points [-]

I think the marginal effects are crucial. If we think of the community as needing one ops person and one research person, the marginal value in each area drops to zero once that role is filled.

Take a simple model where everyone follows their absolute advantage (taking into account marginal considerations and what everyone else is doing). You still get problems when Alice and Bob need to choose simultaneously. Alice does not know what Bob will do, so she does not know what all the marginal considerations are. Alice and Bob should coordinate on each following their comparative advantage.

Owen Cotton-Barratt has a nice explanation of comparative advantage applied to EA.

Comparative advantage is a tricky one to wrap one's head around intuitively! (I study economics and I've often made mistakes about it, in public).

Comment author: jsteinhardt 17 April 2018 12:48:32AM 1 point [-]

If we think of the community as needing one ops person and one research person, the marginal value in each area drops to zero once that role is filled.

Yes, but these effects only show up when the number of jobs is small. In particular: If there are already 99 ops people and we are looking at having 99 vs. 100 ops people, the marginal value isn't going to drop to zero. Going from 99 to 100 ops people means that mission-critical ops tasks will be done slightly better, and that some non-critical tasks will get done that wouldn't have otherwise. Going from 100 to 101 will have a similar effect.

In contrast, in the traditional comparative advantage setting, there remain gains-from-coordination/gains-from-trade even when the total pool of jobs/goods is quite large.

The fact that gains-from-coordination only show up in the small-N regime here, whereas they show up even in the large-N regime traditionally, seems like a crucial difference that makes it inappropriate to apply standard intuition about comparative advantage in the present setting.

If we want to analyze this more from first principles, we could pick one of the standard justifications for considering comparative advantage and I could try to show why it breaks down here. The one I'm most familiar with is the one by David Ricardo (https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example).