In-Depth Notes on Schelling's Paradox and Newcomb's Paradox
Quiz Results
The class average for last week's quiz was 91%, which is considered excellent.
One question had a correct response rate of 68%.
Schelling's Paradox
Background: Introduced by Thomas Schelling, a Nobel Prize-winning economist known for his work on game theory.
Tax Deduction Scenario:
Families receive a $2,000 tax deduction per dependent child, regardless of income.
Questions arise regarding whether this deduction should increase proportionally with family income.
Initial Ethical Consideration
Dilemma: Should a tax rebate for families with children be larger for wealthier families?
Initial Student Response:
Most students felt it was fair for poorer families to receive larger credits.
Rich families should not receive bigger rebates.
Reversing the Scenario
Alternative Viewpoint: What if a surcharge is imposed on childless couples?
Students then felt it was fair for rich childless families to pay a larger surcharge, demonstrating a shift in ethical judgment.
Ethical Arguments Against Increased Rebate
Rich families do not require state financial support; they are already privileged.
Increasing rebates for wealthier families could encourage them to have more children, impacting socio-economic balance.
The tax deduction considers the essential costs of raising children, primarily affecting low-income families.
Ethical Arguments in Favor of Increased Rebate
Children cost wealthier families more; thus, larger rebates should apply.
A fixed rebate could lead to more children being born into poverty.
Most people's intuitive judgment leads them to reject larger rebates for wealthier families.
Taxation Computations
Standard Computation: A progressive tax system is established regardless of family size, with a fixed rebate.
The taxation committee first determines tax rates.
The demographic committee then establishes deductions based on family size.
Alternative Tax Calculation Approach
The demographic committee first sets a baseline family standard (e.g., two children), followed by tax rates that apply.
Resulting tax burdens differ for families with fewer or more children, causing a perceived fairness in the system based on typical family size.
Procedural Invariance Violation
There is an inconsistency in moral intuitions towards taxation based on the order of decisions made by the committees.
Ideally, preferences should remain constant regardless of the presentation order of decisions.
Newcomb's Paradox
Definition: A thought experiment to highlight the conflict between rationality and causality in decision-making.
Scenario: An all-knowing entity predicts choices, leading to different potential monetary outcomes.
Locker #1 has a variable amount (either $10 million or nothing), while Locker #2 has a guaranteed $10,000.
The paradox lies in deciding whether to open one or both lockers.
Predictions and Choices
Popular choice among participants tends towards opening only one locker, believing prediction performance influences outcomes.
Some argue for choosing both lockers to ensure a minimum payout, regardless of predictions.
Rational Choice Analysis
The only rational choice, when analyzed, is to choose both lockers based on principle.
Nozick's analysis emphasizes that people fall prey to a cognitive illusion, mistaking their choice for an influencing factor on outcomes.
Causality versus Self-Signaling
Discuss the difference between real causation and mere self-signaling of one's identity or beliefs (
e.g., regarding charitable giving).
Conclusion on Cognitive Illusions
Cognitive illusions extend deeply into moral judgments, inferring they influence both mundane and significant life decisions, including theological implications around free will and predestination.
These notes encompass detailed discussions from the lecture, providing insights into the implications of Schelling's Paradox and Newcomb's Paradox, their ethical dilemmas, and their relation to cognitive psychology.