Lotteries for everything?

If I owe someone a small amount of money, I sometimes suggest tossing a coin: With a 50% chance we just both forget about the debt, otherwise, we double the debt. The expected money stays the same, the variance is insignificant as the amount is small and with a 50% chance, we do not need to make the hassle of exchanging coins. However, it seems that a lot of people are unwilling to do money betting. Even with amounts less than 10 Euro.  

Another possible advantage of lotteries: You simply need to put in less work in decision-making. For example in the donor lottery: https://app.effectivealtruism.org/lotteries

I looked into using lotteries for funding a few years ago. I didn't really come to a strong conclusion either way, but some of the background considerations described in the post might still be interesting.

I'm generally in favour of experimenting with different granting models and am glad to hear that funders are starting to experiment with random allocation. However, I'd be a little bit cautious about moving to a system based solely on random grant assignment. Depending on the actual grant success rate per round (currently often <20%), it seems likely that one would get awarded grants quite infrequently, which would interrupt the continuity of research. For instance, if somebody gets a random grant and makes an interesting discovery, it seems silly to then expect to wait several years for another random grant assignment to follow up on it. So I feel that random assignment is probably better used for assigning funding for early-career researchers or pilot projects.
 

With respect to quality control,  the Nature news article linked above notes:

assessment panels spend most of their time sorting out the specific order in which to place mid-ranking ideas. Low- and high-quality applications are easy to rank, she says. “But most applications are in the midfield, which is very big.”
 

The current modified lottery systems just remove the low-ranking applications, but if it's easy to pick high-ranking applications, surely they should be given funding priority?

this page/link below is in german, but we know, there are some german-speaking ea´s. it´s an article in an economic newspaper and it´s about the benefit of using lotteries for choosing supervisors/superiors and there seem to be quiet some benefits in some cases. (google translate does a sufficient job here). https://www.wiwo.de/erfolg/management/aleatorische-verfahren-befoerderung-per-zufall-wir-wuerfeln-einen-chef/26621916.html

my guess is: whether lotteries are great depends on the sample. if it´s tricky to make a good decision -> lotteries may be great/ better (than a complex decision scheme). if it´s easy to make a good decision: lotteries sure are a bad thing. 

example: as long as high skilled workers compete for a promotion: lotteries may be a good way to decide whom to promote. but after some years/ decades of lotteries workers may realize that there is no need to excel at ones job, because promotion does not depend on it. or even low-skilled workers may aplly for a promotion. same might be true for apllying for research grants, etc. 

Thanks for writing this! 

When designing a system, you give it certain goals to satisfy. A good example of this done well is voting theory. People come up with apparently desirable properties, such the Smith criterion, and then demonstrate mathematically that certain voting methods succeed or fail the criterion. Some desirable goals cannot be achieved simultaneously (an example of this is Arrow's impossiblility theorem).

Lotteries give every ticket has an equal chance. And if each person has one ticket, this implies each person has an equal chance. But this goal is in conflict with more important goals. I would guess that lotteries are almost never the best mechanism. Where they improve situations is for already bad mechanisms. But in that case, I'd look further for even better systems.