Funding Psychology

Sources of Funding

• Lemelson Foundation - 90% of projects are about machines for agriculture, energy generation, building blocks, water pumping, food processing, etc.

Notes on Funding

Fabulous piece about how people estimate risk and value in economic terms, with a section about half way through on charitable giving.

This is why http://AIDG.org has a picture of one kid with their hand stretched out on their home page, and nothing about the technology.

Depressing, but useful to know!

Vinay

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http://edge.org/3rd_culture/kahneman07/kahneman07_index.html

How much would you pay to save birds from drowning in oil ponds? There is a whole scenario of how the poor birds mistake the oil ponds for real water ponds, and so how much should we pay to basically cover the oil ponds with netting to prevent that from happening. Surprisingly, people are willing to pay quite a bit once you describe the scenario well enough. But one thing is, it doesn't matter what the number of birds is. Two thousand birds, two hundred thousand, two million, they will pay exactly the same amount.

QUESTION: This is not price per bird?

KAHNEMAN: No, this is total. And so the reason is the same reason that you had with time, taking an average instead of an integral. You're not thinking of saving two hundred thousand birds. You are thinking of saving a bird. The emotion is associated with the idea of saving a bird from drowning. The quantity is completely separate. Basically you're representing the whole set by a prototype incident, and you evaluate the prototype incident. All the rest are like that.

When I was living in Canada, we asked people how much money they would be willing to pay to clean lakes from acid rain in the Halliburton region of Ontario, which is a small region of Ontario. We asked other people how much they would be willing to pay to clean lakes in all of Ontario.

People are willing to pay the same amount for the two quantities because they are paying to participate in the activity of cleaning a lake, or of cleaning lakes. How many lakes there are to clean is not their problem. This is a mechanism I think people should be familiar with. The idea that when you're asked a question, you don't answer that question, you answer another question that comes more readily to mind. That question is typically simpler; it's associated, it's not random; and then you map the answer to that other question onto whatever scale there is—it could be a scale of centimeters, or it could be a scale of pain, or it could be a scale of dollars, but you can recognize what is going on by looking at the variation in these variables. I could give you a lot of examples because one of the major tricks of the trade is understanding this attribute substitution business. How people answer questions.

COMMENT: So for example in the Save the Children—types of programs, they focus you on the individual.

KAHNEMAN: Absolutely. There is even research showing that when you show pictures of ten children, it is less effective than when you show the picture of a single child. When you describe their stories, the single instance is more emotional than the several instances and it translates into the size of contributions.

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50% of the population, IQ less than 100. Easy to forget what that means, but it's terrifying when you do think about it!

And it's just refinement over time. Advertisers found that big, thick wads of documents sent in the mail got more charitable donations than one page summaries did. Why? Nobody knows for sure, but some people think it's the sense of obligation - they sent me all this stuff, and the printing cost money so I'll send them something back.

Engineering of a different kind, and an art we can learn and use.

Vinay