Robin Hanson, an economist at George Mason University, writes on prediction markets, futarchy, the Great Filter, and ways to reduce bias.
HN links it for his original essays on the Great Filter and prediction markets, while some commenters find his public bio and persona questionable.
>Someone in the prediction market might agree that free higher education reduces inequality but might also think that it will increase the government’s cost of financing its spending. The latter is what usually gives politicians trouble with financial markets. How would a prediction market resolve this issue?
One approach would be to have multiple markets, that track endpoints like inequality and interest rates separately for any given candidate policy.
In the best case, prediction markets could give you accurate forecasts on a large number of candidate policies, and you could select a policy that the market thinks does a pretty good job according to lots of relevant endpoints. (My hunch is that our current system is bad at searching for such win/win policies, preferring instead the drama that comes from clashing over win/lose policies. For example, you mention free higher education, but how much does the average college grad really use or remember from their degree? I'd argue there is a lot of territory in apprenticeships that is currently unexplored, and smart policy could facilitate this -- especially if we start with small-scale experimentation.)
You're absolutely correct that the market can't help with moral questions such as how much government spending is justifiable in pursuit of reduced inequality. Robin Hanson proposes eventually moving to a system where the job of elected officials is to manage metrics related to what voters want out of government policies,…
You seem unfamiliar with the long and extremely formal research and experimental evidence supporting the use of prediction markets. It might be interesting to read a more detailed popular account [0] and then dive from there into some of the more specific discussions about what happened in the DARPA experiments.
> Prediction markets failed spectacularly to predict the outcome of the recent UK referendum despite an abundance of polling data and the only major uncertainty being statistical (not many people were changing their minds at the last moment, I guess).
Well, you are right that markets are not perfect and are susceptible to aggregated biases of the participants, for example just as how mispricing persists in the stock market.
I don't see how this offers a reason to feel that markets aren't the best that can be done, however. If you can propose a better mechanism by which to get info ahead of time, I (and millions of people) would be very interested.
> Most obviously because prediction markets tend to be quite shallow, and the types of people who use them bring their own mental baggage to the table. Why would a project leader be willing to submit to such a flaky and moreover gameable scheme?
This is bizarre and unsubstantiated. What are you talking about "mental baggage" -- it sounds like you have a personal grudge against market thinking and prefer to attack it, but without basis.
> Why would a project leader be willing to submit to such a flaky and moreover…
Lets consider a game.
A coin will be flipped, and we can bet as much money as we want that either heads or tails will win.
You will win $100 if the price in this market stays >75% chance of heads for 7 days continuously.
So you keep buying up shares of heads, moving the price from 50 -> 60 -> 70 -> 80.
by the end you are betting $4 for the chance to win $1.
I know that the result is 50-50, so if I bet $1 against you, and have the chance to win $4, then that means my expected profit of taking this bet is %200.
Which makes this one of the best investments available on earth.
Which means many people will want to participate.
Every bet you make at the price 80-20 costs you $1, but is only worth $0.40. you are losing 60% of however much money you bet.
So if you bet $200, then your expected loss would be $120. which is even bigger than the $100 you could potentially win by manipulating the market.
It doesn't matter if I bribe a manipulator with $100, or with $1 billion. The same logic holds.
Having a vested interest in the outcome of a decision does not give you any ability to manipulate us into making that decision.
http://mason.gmu.edu/~rhanson/biashelp.pdf
I don’t think so. In fact there is actual theory about all this.
- https://en.m.wikipedia.org/wiki/Aumann%27s_agreement_theorem
- https://www.scottaaronson.com/papers/agree-econ.pdf
and in particular,
- https://mason.gmu.edu/~rhanson/prior.pdf
If your goal is just to manipulate someone else into doing what you want, regardless of what the facts say nor what their beliefs say about the facts or about your beliefs, then sure, that is pure manipulation and not related to strategies for effective disagreement resolution.
It’s also not relevant or useful to bring up the fact that humans are not rational Bayesian actors, again because we’re talking about how best to achieve unified shared understanding of the true facts and to ensure we only derive beliefs from that (anything else can only be manipulation, not decision resolution, by definition). We may fall short of the best solution due to our flaws and limitations, but that doesn’t render the best solution any less the best, not make some other seemingly more attainable solution better or more worthwhile.
Living in VR, and the implications thereof, have been written about in SF for decades. The earliest work is "Simulacron 3", from 1964. It's been done to death in anime. "Sword Art Online" is probably the best known stuck-in-VR anime, but "Log Horizon" deals with the philosophical aspects in more depth. Hanson is not breaking new ground; he's recycling SF as economics.
Read Hanson's list of "wild ideas".[1] "By 2100, the vast majority of "people" will be immortal computers running brain simulations." (And the rest will be keeping the server farms going?) "If we keep writing down common sense datums until 2100, we can make computers as smart as people." (After 30 years of Cyc trying that, that's probably a no.) "If we allowed complete freedom of contract, law could be privatized, to our common benefit." (He's at George Mason University, which is a right-wing think tank, and has to say stuff like that to get tenure.)
[1] http://mason.gmu.edu/~rhanson/wildideas.html
http://mason.gmu.edu/~rhanson/greatfilter.html
"Humanity seems to have a bright future, i.e., a non-trivial chance of expanding to fill the universe with lasting life. But the fact that space near us seems dead now tells us that any given piece of dead matter faces an astronomically low chance of begating such a future. There thus exists a great filter between death and expanding lasting life, and humanity faces the ominous question: how far along this filter are we?
"Combining standard stories of biologists, astronomers, physicists, and social scientists would lead us to expect a much smaller filter than we observe. Thus one of these stories must be wrong. To find out who is wrong, and to inform our choices, we should study and reconsider all these areas."