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Commenters saying: "but someone can influence the market" should at least listen to the podcast (and really should also) familiarize themselves with the existi

Commenters saying: "but someone can influence the market" should at least listen to the podcast (and really should also) familiarize themselves with the existing literature. Do you think this critique has never been considered? If you disagree with the reasons why this is not a problem, go ahead and critique those directly. Please don't reflexively pooh-pooh an idea you don't really understand.

PragmaticPulp 5y ago
The link is a transcript of the podcast. Are we really missing anything by not listening to it? Also, could you at least summarize some of the counter-arguments or even link to any of the literature?
- avsteele 5y ago
  read==listen here. Do a search for "manipulate" in the text for a simple counter-argument. tellingly. None of the critiques I see address these counterarguments even, so I suspect knee-jerk responses are mostly whats posted here.
  - dwohnitmok 5y ago
    I think you're being uncharitable towards the critiques. In particular Hanson doesn't actually address the manipulation most of these critiques are talking about. See e.g. https://news.ycombinator.com/item?id=28541243 https://news.ycombinator.com/item?id=28541243 Moreover even among futarchy proponents, many do not advocate for it as the dominant form of government, but only one form for certain operations. Hanson's position is on the more extreme edge here.
LanceH 5y ago
The simple reason you can't manipulate the market for profit is that everyone else can make the same bet you are making, quickly reducing the profit since you have the added expense of manipulating the market. If a person can manipulate the market without expense, then they can do it without relying on the profit and the market isn't the problem. It will, however, allow them to bet on the market, providing a good indicator.
- DuskStar 5y ago
  Imagine that there's a market for which day a politician will die on. Initially, all of these daily contracts are priced very low because there is a very low chance of a politician dying on any given day. So, you buy quite a few of one particular day, and then go kill the politician.
  - eutropia 5y ago
    Then you either: - Collect your money and be arrested and sent to jail for murder - Evade capture but never collect your money. How does this work, again?
    - solveit 5y ago
      Don't know why you're getting downvoted. The comments here are about as sophisticated as "Short Tesla and kill Elon. Stock markets are broken QED".
  - tshaddox 5y ago
    Seems like the politician would know precisely when to stay home.
SilasX 5y ago
Or, since you understand that literature so well, you could contribute to the discussion by explaining its key insights on those points.
BurningFrog 5y ago
I haven't seen Hanson address the "destructive insider trading" scenario where I buy a prediction that California air quality will be bad, and then spend the summer starting wildfires in California forests. Today, people have no incentive to do that other than "wanting to watch the world burn". But if you can get rich burning forests, more forests will burn. I don't doubt Hanson has thought about this. I just haven't seen it addressed.
- tshaddox 5y ago
  My guess is that if a particular prediction were really so easy (low cost and risk) to manipulate then you wouldn't expect much trade volume. As an easier example, you wouldn't expect many people to bet money that no one will tweet a cartoon of a cat wearing a pink hat today, because it would be obvious to everyone that it would be trivial for an insider to manipulate this outcome. As for your specific example, starting wildfires is an extremely serious crime that I expect the authorities would spend significant resources investigating, so I don't know how bettors would estimate the ease of manipulation for that market. Even if the prediction market were implemented in a perfectly anonymous system where you're guaranteed to be able to collect (and spend) your money without authorities knowing you were the one who profited from that prediction market, it seems like you have a pretty high risk of getting caught simply for the act of arson itself (not to mention the "risk" of firefighters controlling the fires that you start). I'm also not sure how many people there are out there who refrain from starting wildfires only because there is no direct financial incentive, and not for other reasons (like not wanting to destroy massive amounts of ecosystem and property and potentially kill many people).
  - sudosysgen 5y ago
    Air quality is something that is hard to predict and really quite important for many reasons. I think you underestimate organized crime. Starting wildfires is easy and skillful criminals won't get caught. The people that pay them take on an even slimmer risk.
    - tshaddox 5y ago
deleted 5y ago
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PragmaticPulp 5y ago

The link is a transcript of the podcast. Are we really missing anything by not listening to it? Also, could you at least summarize some of the counter-arguments or even link to any of the literature?

avsteele 5y ago
read==listen here. Do a search for "manipulate" in the text for a simple counter-argument. tellingly. None of the critiques I see address these counterarguments even, so I suspect knee-jerk responses are mostly whats posted here.
- dwohnitmok 5y ago
  I think you're being uncharitable towards the critiques. In particular Hanson doesn't actually address the manipulation most of these critiques are talking about. See e.g. https://news.ycombinator.com/item?id=28541243 https://news.ycombinator.com/item?id=28541243 Moreover even among futarchy proponents, many do not advocate for it as the dominant form of government, but only one form for certain operations. Hanson's position is on the more extreme edge here.

LanceH 5y ago

The simple reason you can't manipulate the market for profit is that everyone else can make the same bet you are making, quickly reducing the profit since you have the added expense of manipulating the market. If a person can manipulate the market without expense, then they can do it without relying on the profit and the market isn't the problem. It will, however, allow them to bet on the market, providing a good indicator.

DuskStar 5y ago
Imagine that there's a market for which day a politician will die on. Initially, all of these daily contracts are priced very low because there is a very low chance of a politician dying on any given day. So, you buy quite a few of one particular day, and then go kill the politician.
- eutropia 5y ago
  Then you either: - Collect your money and be arrested and sent to jail for murder - Evade capture but never collect your money. How does this work, again?
  - solveit 5y ago
    Don't know why you're getting downvoted. The comments here are about as sophisticated as "Short Tesla and kill Elon. Stock markets are broken QED".
- tshaddox 5y ago
  Seems like the politician would know precisely when to stay home.

SilasX 5y ago

Or, since you understand that literature so well, you could contribute to the discussion by explaining its key insights on those points.

BurningFrog 5y ago

I haven't seen Hanson address the "destructive insider trading" scenario where I buy a prediction that California air quality will be bad, and then spend the summer starting wildfires in California forests. Today, people have no incentive to do that other than "wanting to watch the world burn". But if you can get rich burning forests, more forests will burn. I don't doubt Hanson has thought about this. I just haven't seen it addressed.

tshaddox 5y ago
My guess is that if a particular prediction were really so easy (low cost and risk) to manipulate then you wouldn't expect much trade volume. As an easier example, you wouldn't expect many people to bet money that no one will tweet a cartoon of a cat wearing a pink hat today, because it would be obvious to everyone that it would be trivial for an insider to manipulate this outcome. As for your specific example, starting wildfires is an extremely serious crime that I expect the authorities would spend significant resources investigating, so I don't know how bettors would estimate the ease of manipulation for that market. Even if the prediction market were implemented in a perfectly anonymous system where you're guaranteed to be able to collect (and spend) your money without authorities knowing you were the one who profited from that prediction market, it seems like you have a pretty high risk of getting caught simply for the act of arson itself (not to mention the "risk" of firefighters controlling the fires that you start). I'm also not sure how many people there are out there who refrain from starting wildfires only because there is no direct financial incentive, and not for other reasons (like not wanting to destroy massive amounts of ecosystem and property and potentially kill many people).
- sudosysgen 5y ago
  Air quality is something that is hard to predict and really quite important for many reasons. I think you underestimate organized crime. Starting wildfires is easy and skillful criminals won't get caught. The people that pay them take on an even slimmer risk.
  - tshaddox 5y ago

deleted 5y ago

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