# 55

cross-posted to ethresear.ch and LessWrong

# Motivation

Quadratic funding[1] is a powerful mechanism for resolving some collective action problems. But it has a major limitation - it relies on some third party, that provides a matching pool of funds.

In the most dangerous collective action problems, we don't have such third party helping us from above. Those situations already involve the most powerful actors, so we can't expect someone more powerful to resolve the conflict, like a galactic mom.

Some examples:

• global superpowers trying to coordinate to fight climate change
• AI organisations coordinating to pay AI alignment tax (more info here)
• for example by funding safety research
• or creating some large dataset together, that's useful for alignment
• or funding methods which are thought to be safer, like STEM AI or tool AI
• in general, escaping inadequate equilibria (see this post for many great examples)
• and most importantly, conflict between transformative AI systems or their owners[2]

# Solution

One thing we can try in this situation, is to create a smart contract where each party says "I'll pay more if others pay more". This way, if you decide to increase your contribution by 1$, it causes the pot to grow by more than 1$, because your dollar caused other agents to contribute some more. This leverage, in some situations can be enough to make someone pay, because the value they get out of the bigger pot is higher than what they have to pay.

Some properties that it would be nice to have in such a system are:

• continuity - every increase in your payment causes an increase in others' payments
• known payment limit - you won't have to pay more than some limit you chose
• everyone is incentivised to contribute something - just like in quadratic funding, small contributions get a high leverage (it can get arbitrarily high, as you'll see later) - so even if you're only willing to pay if you get >100x leverage, there is always some contribution size that gives you such a high leverage

A very simple system that has these properties is given by those equations:

• is the amount that i'th agent has to pay
• is the i'th agent payment limit
• tells how quickly i'th agent's limit will be approached as new agents make contributions (the choice of this parameter is underspecified for now, and is discussed in Parameter choice section)
• given all those parameters, we find that satisfies the two equations above

It turns out, this system has a pretty graphical representation:

Each quarter-circle represents one agent's contribution. Area of a quarter-circle is the payment limit - the maximum amount this agent can pay. The yellow areas are what they currently pay in this particular situation. The squares on the right have the same areas as the respective sectors. So the height of the tower of squares represents - the sum of square roots of payments. The distance of a quarter-circle's center to the right corner is - for small , the quarter-circle is put further to the left and you can see that they saturate more slowly.

The animation shows the procedure for finding the solution to those two equations. We start with some arbitrary , then compute the payments (yellow sectors), then compute , recompute payments, recompute , and so on, until we converge on the stable solution.

On the next animation, you see what happens when someone new joins the smart contract. Their contribution increases , which makes others pay more. (Here the procedure of finding the solutions is ommited, and just the final solutions are shown).

Here you can see the nice feature of quadratic funding: for small contributions, the leverage can get arbitrarily large. (To be precise, we compute the leverage on the margin, so how the pot changes if you pay 0.01more.) Because of this feature, the amount that you're willing to pay is roughly proportional to how much you care for the common resource (see this explanation of QF for the precise argument). You can find the code for this algorithm here. ## Example Here you can see an example of such a contract from start to finish: There are 5 agents joining the contract one by one. You can see that the early contributions saturate quickly - what those agents finally pay is close to their payment limit. But there are always some less saturated contributions (the late ones), which provide some leverage to the newcomers, so the contract is alive. # Future work ## Quadratic funding problems Unfortunately, this mechanism inherits all the problems that ordinary quadratic funding has, like Sybil attacks and influence buying, but there is ongoing research trying to solve them [1.] [2.]. If we fail to solve those problems, we can always fall back to linear funding (compute as the sum of payments, instead of the sum of square roots of payments). This would be more robust and still enable coordination in some kinds of scenarios. ## Parameter choice Each contribution is specified by two parameters: , and . The should be chosen by the contributor, but how the is set, is left open. If its choice was left to the contributor too, it would be always optimal for them to choose the lowest they can. So instead it should be set by the algorithm in a systematic way. For example if we set it constant for all the contributors (which corresponds to all the quarter-circles having the same center), there may come a point where all of them become almost fully saturated and the leverage for new contributors vanishes. But this may rarely be a problem if the number of agents is small. Alternatively, if each new contribution gets a smaller than the previous ones (quarter-circles get placed more to the left), there will always be some unsaturated quarter-circles, so there always be a nice leverage for new contributors. But now, everyone is incentivised to wait for others to pay first, because being on the left means you pay less. This could create a deadlock where everyone is waiting for everyone. If we made a simulation of how agents behave in this system, we could test several methods of setting , and see which one results in the highest pot at the end. ## Strategic thinking Another potential problem is strategic thinking. Agents can think: "even if I don't pay, the other agents will fund this anyway". This problem is definitely smaller than in traditional fundraisers because of the leverage that this mechanism gives. But still, if many other agents join this contract after you, the real leverage you get (what would happen counterfactually if you didn't contribute) will be smaller than the immediate leverage you had at the time of joining the contract (the amount that the pot increased divided by what you paid). This real leverage is much harder to compute, because it requires simulating what would happen if you didn't contribute, which requires simulating agents' strategies. A solution would be to modify the algorithm to make the leverages predictable, so that everyone would know for sure they will get the leverage they signed up for. This would prevent strategic thinking, and also make agents more willing to trust this system. ## Coordinate where there is no pool of funds This approach can be used directly where we have a shared resource which can be improved by throwing money at it. But what about situations which aren't directly about money, like coordinating not to do some harmful thing? Here, we would need to quantify what it means to do this harmful thing, and this quantification needs to be continuous. For example when countries coordinate to prevent climate change, we could count how much CO2 each is emitting - this number quantifies harm, in a continuous way. And if those measures could be reliably verified by some oracle, we could construct a system analogous to the one above: "I will emit less, if you emit less". An example for AI safety, could be performance on some alignment benchmark. AI organizations deploying their models, could say: "I will squeeze a few more points on this benchmark, if you squeeze some more". Of course it's hard to keep such promises exactly - you probably will undershoot or overshoot the promised number. For this reason, there also need to be some rewards and penalties for missing the target. # Acknowledgements Many thanks to Matthew Esche and Rasmus Hellborn for all their suggestions! As of 2022-09-21, the certificate of this article is owned by Filip Sondej (80%), and GoodX (20%). 1. This post explains the motivation behind quadratic funding very clearly, but you don't need to read it to understand the technique described here. ↩︎ 2. This example may be the most important, but also the hardest to imagine as those systems don't exist yet. This post (section "1. Introduction") does a good job of describing this scenario. To quote it: "The size of losses from bargaining inefficiencies may massively increase with the capabilities of the actors involved." ↩︎ # 55 # Reactions Mentioned in # More posts like this Comments11 Sorted by Click to highlight new comments since: I think you're describing is exactly (or almost exactly) Mutual Matching that I wrote about here on the forum a while ago: Incentivizing Donations through Mutual Matching Oh yeah! They are identical in spirit, but a bit different in implementation. So they will have different results sometimes. It would be nice to test both of them in some real world setting. Edit: it seems that your method is more general? And that maybe you could set the curves in a way that the matching works the same as described here. So the method in this post maybe could be seen as a specific case of Mutual Matching, aiming to have some particular nice properties. Agree with the testing question. I think there's a lot of scope in trying to implement Mutual Matching (versions) in small or large scale, though I have not yet stumbled upon the occasion to test it in real life. I would not say my original version of Mutual Matching is in every sense more general. But it does indeed allow the organizer some freedom to set up the scheme in a way that he deems conducive. It provides each contributor the ability to set (or know) her monotonously increasing contribution directly as a function of the leverage, which I think is really is a core criterion for an effective 'leverage increasing'. I'm not yet 100% sure whether we here have the same knowable relationship between i's leverage and her contribution. Thought provoking in any case, and looking also fwd to studying it hopefully once also in more detail! Every way we can improve on the Quadratic Funding is good. Imho, really, QF mainly deserves a name of information eliciting or funds allocation rather than funding mechanism, as, while it sounds good to be able to get the 'first best', asymptotically all money has to come from the central funder if there are many 'small' donors. I would not say my original version of Mutual Matching is in every sense more general. Ok, I think you're right, it's not strictly more general. QF mainly deserves a name of information eliciting ... as ... asymptotically all money has to come from the central funder if there are many 'small' donors Agreed! ability to set (or know) her monotonously increasing contribution directly as a function of the leverage, which I think is really is a core criterion for an effective 'leverage increasing' Yeah, that is a crucial component, but I think we need not only that, but also some natural way in which the donation saturates. Because when you keep funding some project, at some point the marginal utility from further funding decreases. (I'm not sure how original Mutual Matching deals with that.) I think Andrew Critch's S-process deals with that very elegantly, and it would be nice to take inspiration from it. (In my method here, the individual donations saturate into some maximal personal limit, which I think is nice, but is not quite the same as the full project pot saturating.) Very cool! Manifold has been considering quadratic funding for a couple situations: And in the latter scenario, we had been thinking of a matching pool-less approach of redistributing contributions according to the quadratic funding equation. But of course, the downside of "I wanted to tip X but the commenter is getting less!" always is kind of weird. I like this idea of proportionally increasing commitments out of a particular limit, it seems like a much easier psychological sell. Really appreciate the animations btw - super helpful for giving a visual intuition for how this works! Awesome! I'd love to see the idea tested in a real world situation. I'd be happy to help with building this system if you want :) Hey Filip! I've been working on an implementation of QF for Manifold! Preview: https://prod-git-quadfund-mantic.vercel.app/charity Specifically, we actually DO have a matching pool, but there are some properties of fixed-matching-pool QF that is not super desirable; aka it turns into a zero-sum competition for the fixed pool. We're trying to address this with a growing matching pool, would love to see if your mechanism here is the right fix. More discussion: https://github.com/manifoldmarkets/manifold/pull/486#issuecomment-1154217092 A few thoughts. I'm skeptical of using this for AI alignment. AI risk is already well funded, so if it all it took was adding more resources or hitting a metric, existing orgs could just buy that directly. I think the economic issues of AI risk are less in its lack of legible liquid resources, and more in the difficulty of getting the AI field overall to cooperate to not race. However, I still think pool-less quadratic funding is very exciting for donations to causes that have room for more funding (like direct charity or meta EA tooling) I disagree with the strategic thinking section. People don't think in terms of maximizing leverage, but in maximizing good-to-yourself per spent. When other people donate after you, you spend slightly more than you already did, and you get a lot more public good "for free" (paid for by other people) which makes it worth it. And to the extent people are more altruistic, they'll generally fund these goods more rather than less.

Yeah, I agree that using this to further fund AI alignment wouldn't help much. I'm less sure about "hitting the metric" - the thing is, we don't have any good alignment metric right now. But if we somehow managed to build it, convincing AI labs to hit such a metric seems to me like the most feasible thing to make AI race safer. But yeah, building it would be really hard. Do you maybe have some other ideas how to make AI race safer? Maybe it is possible to somehow turn them into a continuous value that they could coordinate to increase?

Re: strategic thinking - It may be true that most people won't care so much for their real leverage (they won't consider the counterfactual where they donate less), but it definitely isn't rational. So while it may more or less work, I wouldn't like this system to give an impression that it tricks people into donating. And, more importantly, my main hope for this system, is to facilitate cooperation between most powerful agents (powerful states, future supercorporations, TAI systems), rather than individual people. I assume such powerful actors will consider what happens if they do not donate, and selfishly do what's optimal for them.

Doesn't the leverage go both directions? Donating causes earlier people to pay more, but also adds leverage for later people? Such that you don't know if later people would've donated unless you also did.

Though maybe that depends on some factors of the system, whether the leverage grows or shrinks with more donations. I think this might hit your worry that it incentivizes donating later cause that makes you pay less, but if actors are proper EV-maximizers won't they scale up their donation such that the expected payment/leverage is the same?

Seems like there's lots of strategies at play here, including donating several times. Making it work both for real-life humans with real-life problems and TAI seems ambitious though, they require very different incentives to work and I imagine the design ends up significantly different. Interesting stuff!

You're right, the leverage definitely goes two ways. The thing it, this later leverage will tend to be smaller than the one you get immediately. At least, this is how the system behaves in my naive simulations. The exception is, when you expect some very big contributors to join later on - then the later leverage is bigger. So yeah, it's a complicated situation and I didn't want to go into that in the post, because it would get too bloated.

And yeah, humans and TAI may have different strategies which complicates it further. This is why I'm not yet fully satisfied with this mechanism, and I will try to simplify it, so that we don't have to care for all those strategies.

Curated and popular this week
Relevant opportunities