A Moral Dilemma


When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic–Dresden James

The Moral Dilemma

Please share with us how you would handle the following moral/ethical quandary. There is no “right” answer but pretend your goal is the greatest good for the greatest number in the long run or, conversely, the least harm to the fewest people. Prize emailed.

Here goes:

A group of children were playing on two railway tracks, one still in use while the other disused. Only one child played on the disused track, the rest on the operational track.

TRAINThe train is coming, and you are just beside the track interchange. You can make the train change its course to the disused track and save most of the kids. However, that would also mean the lone child playing on the disused track would be sacrificed. Or would your rather let the train go it way?

Please explain your choice. Hint: the above dilemma is relevant to economics and investing. What would YOU do?

I will post my reply tomorrow…………until then.

22 responses to “A Moral Dilemma

  1. Phew! An interesting dilemma. My answer from a purely intellectual standpoint, if I am to achieve the goals stated “the greatest good for the greatest number in the long run or, conversely, the least harm to the fewest people” would be as follows:

    1. From a very immediate and urgent point of view, the desire would be to switch tracks, which would save a number of children. However, tempting this might be, I believe this would be an erroneous decision in the long run.

    2. Firstly, it a wrong signal to law-abiding citizens, i.e. that following the law and rules does not pay. The child on the disused track is clearly playing in an area that is designated safe and has the right of way so to speak. To switch tracks and put the child to certain death is wrong. Even when weighed against the lives of many children on the other track, this is still wrong.

    3. Secondly, it sends a positive reinforcement to law-breaking citizens that the majority rules, even if it is against the law. Just because there are a larger number of children on the other track, is it right that they should be saved? Assuming these children are of a reasonable age and are aware they shouldn’t be playing in the used track area, they must take the risk of injury or death for playing in an area that is forbidden to them.

    4. Whilst doing so, may seem unreasonably cruel, it is important to think of the long term. The action of switching track may save more children but it may send the wrong message to other children in other areas is that it is alright to play in used tracks. This may cause greater damage in the long run.

    However, in real life I would assess whether it would be possible to warn the children on the used track to get off it immediately. Chances are, with so many kids on the used track, they would be able to notice the train barreling down on them and get out of the way. Switching tracks would certainly mean the death of the single child on my hands, whereas doing nothing still leaves the possibility of the children being saved, if I can shout loud enough.

  2. I will change the course of the train so that more kids are saved.

  3. I may be a terrible person but I would leave the train on its course.

    • OK, but please explain your reasoning–for the prize!

      • Ah I missed this before your post today, but for closure’s sake my reasoning was this: If I put myself in the shoes of the kids playing on the used track, I knew I shouldn’t be there. The track is in use.

        Now if I am the lone minority, the one kid who was smart enough to play on the unused track, I would have earned the sense of safety to play without having to be alert to any danger. Who am I as an outsider to change that? What gives me the right to change that?

        By changing the course of the train, I am saving more lives, but I am whittling down a law of nature, which states “If you make a choice, it has consequences. Therefore make a smart choice.”

  4. I will leave the things as it, I will not make the train change its course. The kids should know that the tracks are in use and are dangerous. Besides I will not be able to bear in my mind killing a kid that was playing in the correct place for saving kids that were playing in the wrong place.

    In addition in the long run if this happens no kid will be allowed to play there, preventing future accidents.

  5. Tough question. My knee jerk reaction was to send the train towards the one child, as it would be better to save several kids and sacrifice the one. However, the more I thought about it, the more I leaned towards letting the train continue on the operational track towards the group of innocent children.

    Why? Sending the train towards the single child also sends it to an non-operational track. This means that the train will derail. That leads to other questions such as, “How many people are on the train?” “Is anyone of major importance on the train?” “What if the train is carrying chemicals that would be toxic if spilled and kill even more people in the fall out?” The collateral damage of a train derailment is unknowable in this case, and the potential downside is significant.

    How does that relate to investing? I think it’s always important to know your downside, and in this scenario we do know one of the downside scenarios: the group of kids die. If the train derails, it could have a much farther and long lasting effect depending on the contents of the train, which we do not know. In Investing we are always making assumptions, and it seems best to stick with what is knowable, and acknowledge what we don’t know. We don’t know what or who is on the train, nor the extent of collateral damage from a derailment. We do know that a group of kids would die if we do nothing, but we would definitely save a kid, an engineer, and possibly a great deal more. That is also something that Charlie Munger advocates in investing. Sometimes it’s best to just do nothing. Stick with the knowable facts, model a worst case downside and try to avoid it, use second and third level thinking to model out additional and unintended consequences to specific actions. Let the train continue, do nothing, the group of kids die on the operational track.

    • Also, this is clearly an emotionally charged question just like investing can be an emotionally charge exercise. Emotions can lead to knee jerk reactions and decisions that aren’t thought all the way thru, therefore from an investing standpoint I think it’s important to try and remain detached emotionally.

  6. Just let the train go its way…changing track would be the same as punishing good and rewarding wrong. Surely not all children on the train path will die, the survivors will learn a good lesson from their dead comrades and from the lone child. Saving or warning these children will just make them feel like they just can do anything and someone else is responsible for fixing it. Doubtless, they’ll go back to play on that same track the following day still expecting that they will be saved again at the sight of a coming train.

  7. Hi John,
    This isn’t quite what you are after, but important as a mental framework.

    I always want to ask: Just because someone presented me with this framework or problem, am I really constrained by the ‘rules’ assumed or implied in that problem statement. Professors that focus too much on these kinds of ‘sophisticated’ dilemmas are the same ones that teach leverage is your friend, trust the models above common sense, and 100 year/fat tail financial events do not really occur every 8 or 10 years…

    I try very hard to avoid entering into these kinds of situations in the first place. Charlie Munger tells of a guy who ran a family business and went on to get an Ivy League advanced degree. One of the tests practically forced the typical response of ‘stretch out accounts payable, and make the suppliers suffer’. The fellow wrote in the answer they wanted, but also wrote that he would never do that because you kill long term relationships, friendships, and open the door to ethical/bahavior bad decisions that could be totally avoided.

    If forced to answer the problem you stated, try to step back and and question the assumptions. Can you run faster than the train? Is there some way to communicate verbally or physically to all of the kids that they need to move? Are other people nearby that could help? Can you communicate with or get the attention of the people on the train? Can you puts things on the track in the way of the train to clue them in that something is wrong? Looking at the picture of the train, I assume you could jump on and get a hold of someone.

    While not a direct answer to an awful problem… I think that a better approach or framework in the beginning can avoid having to decide whether most people are ‘saved’ and the system derails or everyone is ‘wiped out’ while the system remains functional.

  8. I’d leave the train on it’s current course, assuming the kids knew apriori which track was operational. I believe that it would be wrong to hurt the one kid who did nothing wrong, and in fact behaved rationally/legally/safely by playing on the non-operational track and he shouldn’t have to pay the price for the others that chose to ignore common sense and potential laws and play on the operational track.

  9. Hey John, this is off topic but I was wondering if you could recommend some resources for an incoming investment banking analyst. I’m starting this summer and will be in a generalist m&a/ restructuring group. Thanks for the help!

  10. I’d argue that one would flip the switch to save the group in order to limit the negative impact of the lost lives on their immediate community and potential unintended consequences brought on by that loss. Thus, the small group is saved due to their greater interconnectedness with others and in spite of their own stupidity.

    One quick way to imagine the above logic is to see each as a node connected to others. And I assume that each node is connected approximately to the same number of other nodes and that all individuals playing on the tracks are a subset of a larger group. Therefore, I feel that the loss of one node is better, on average, than multiple losses as the second outcome would cause a greater negative impact on the unity and social cohesiveness of the group and perhaps bring about much worse unintended consequences. The main focus of my decision, then, is to minimize damage to the least number of folks in the long run.

    Another angle I considered as important to think about is the risk all individuals took on in their decision to play on the tracks. All involved engaged in an activity that does not appear to offer any real tangible upside reward yet also offers extremely unlikely and devastating consequences for both the individuals and community at large. Perhaps in isolation, the lone individual faced marginally less risk due to his choice to play on the disused track but I’d offer up two conditions. First, was he aware of this switch that could automatically switch tracks? Secondly, did he only play on the disused track when other kids played on the used track?

    If the answer is yes to both then I’d argue his actual risk was greater than the group and if the answer is no to both then his perceived risk would appear to be lower than the group. If the answer to the first is yes and the second is no or vice versa, it would seem that his perceived risk was marginally lower than the group. Nonetheless, the individual faced no real reward for or upside to playing on the tracks and only slightly less downside risk which happens to be quite devastating.

    If we look at these same questions from the perspective of the group, we arrive at interesting answers. If the answer is yes to both questions, then their behavior knowingly put the other kid in harm’s way which is wrong. If the answer is no to both, then these kids are simply stupid for playing on a track with no way to protect themselves from harm. If it is no/yes or yes/no, then we are somewhere in between.

    However, I should also point out that perverse incentives are created in saving the group. First, it allows the collective memory of the group to place greater trust and faith in being saved when engaged in future risky behaviors which could create a vicious cycle over time. Second, I feel that the quickness to sacrifice the individual for the group would encourage further tight-knit group behavior and discourage loners which could limit their viewpoints and discourage alternatives which is a big risk and limits contributions to the culture.

    So in short, I choose to sacrifice the individual in order to preserve social cohesiveness of the larger community. However, if the individual had somehow been taking on good risk that offered tangible benefits to the larger group in playing on the railroad then the answer would be much more difficult to answer.

    Lastly, why was the railroad operator asleep at the switch and forced to make this decision at the last second? And why can’t the local community organizer build playgrounds to keep these kids safe? And why do I have a feeling that this lone individual also loves to read Ayn Rand?

    Perhaps the best outcome after that tragedy is for the lone individuals to somehow band together and build their own John Galt jungle gym.

  11. I would change tracks. I’m sure I will be in the minority on this, but you just don’t play on train tracks, period.

  12. Redirecting the train toward the one prudent child will only save more children today. The children playing on the wrong tracks will be killed by the next train.

    There is always a next train.

  13. Dear John,

    Great problem!

    2 points to resolve the moral impasse:
    (1) utilitarianism: the greatest sum of good for people

    (2) go against your human bias: people treat acts of OMISSION differently in their mental system compared to acts of COMMISSION, even when having the same consequence.

    To see this: what would you do if on both tracks just one child was playing? (equivalence) The bias is clearly towards omission.

    (2.2) Equivalence in the stock market: Foregone profit from NOT BUYING the right stock is equivalent to the same amount of loss from BUYING the wrong stock.

    I once heard about this problem in a pub, never really thought about it. Now I connected the dots thanks to this blog! (and reading J. Montier)

    Best regards from Paris- Hollandistan,
    Belgian Guy

  14. Hi John,

    I would let the train go its course and scream so hard to warn the many children to get out of the railway track.

    My focus is not on the number of children my choice might save but on the possible damage a derailed train might cause.

    My choice might cause so much pain in the short-term view (death of many children) however, I would also avoid the risk of the train being derailed should I diverted it in an unused railway track.

    The train might be a passenger train or a cargo train:
    1. Should a passenger train be derailed, there might be a loss of so many lives.
    2. Should a cargo train be derailed be derailed in a populated area, there might be a loss of so many lives.

    Thank you,


  15. I would leave the train to continue on the same track. The children playing on the operational track would be aware of the possibility of a train passing by and would jump off the tracks before the train hits them. On the other hand the child playing on the non-operational track would never think that he could be hit by a train. The probability of saving more lives will be in leaving the train to proceed on the same track, also given the fact that there are other unknowns such as num of passengers in the train etc.

  16. Hi,
    I would like to access a few specific lecture notes,can you please post them in yousendit.com.I’m keen to read about fund managers research process and there are a few gems in the lectures involving retail focussed fund,LEAPS,investing in a dying industry,distressed tech company.

  17. In this situation you are forced to chose between killing the group of children, and killing only one. I would kill the one child.

    There is no middle ground here. Doing nothing is choosing to kill the group of children. You can argue about society, and how stupid the group is, but if the kids were not on the train tracks and doing something else stupid, that doesn’t give you the right to kill them. The same applies here.

    I would hope to warn the one child in time. Yell, scream, run and push him clear…whatever.

    The other choice is “when” to act. If you wait too late, you might derail the train, killing even more people. I would act quickly (I hope), both for the sake of the one child, that I would hope to warn, and the train itself.

  18. Interestingly I hadn’t really considered the fact that the lone child was abiding by the “rules” and playing safely. For me this is a moral dilema over action vs inaction. Doing nothing can be morally defended because you are not in any way responsible for the actions that happen. However acting, and changing the lines results in you personally choosing who lives and dies.

    I recently considered another moral dilema in investing on my blog here http://iwantistrive.com/dilema/ still trying to decide on that one.

  19. Abdul Rasheed

    From My point of view; I would let the train go on the same track; not because of the child; But letting the train on the wrong track will lead to risking the life of all those in the train if its allowed to run on a disused track. The track would be mostly damaged for it to be not in use.

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