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Just game-theoretically, suppose you bet $100 on some disaster. That disaster causes $10,000,000 of harm, but only causes you $90 of harm individually. You've
by cowpig 7mo ago
Just game-theoretically, suppose you bet $100 on some disaster.
That disaster causes $10,000,000 of harm, but only causes you $90 of harm individually.
You've gained $10, but your $10 gain is a millionth of the harm caused.
Generally-speaking, there's an enormous asymmetry between the cost to create/build and the cost to destroy. So now we have a mechanism by which individuals have a financial incentive to cause harm...
Don't these markets create a mechanism for society to race to self-destruction?
- Jblx2 7mo agoHow is that different from regular old insurance?
- cowpig 7mo agoInsurance is usually for things that primarily affect the purchaser?
- hunterpayne 7mo agoThere is no law that requires that and plenty of policies are bought that don't directly effect the purchaser in the way you imply.
- cowpig 7mo agoAnd in some of those cases they can warp incentives, right?
- HWR_14 7mo agoSearch for "assassination markets", which is a longish treatment of this idea. Specifically, people collectively can bet large sums of money that X will not be killed Thursday at 5pm. And anyone can take the other side at insanely good odds...
- pants2 7mo agoCouldn't that be said of stock markets and any markets? United Healthcare stock dropped 10% immediately after its CEO was killed.
- cowpig 7mo agoWell, there are laws against insider trading.
- mcmcmc 7mo agoPrediction markets advertise insider trading as a feature, and enforcement of financial crimes is a racket anyway. If you know the right people, make the right campaign contributions, laws just don't apply to you.
- cowpig 7mo agothis kind of cynicism is malignant
- chii 7mo agobut you don't deny there's some element of truth to it tho?
- mcmcmc 7mo agoSee I would say the malignant part is the systems and people in power who enable and profit from corruption.
- cowpig 7mo agoThe statement that "this is how it works, it's completely corrupt" is what enables the corruption. It is only through the collective demand that systems serve us that they can be aligned. If you believe that the system is corrupt then your decisionmaking function will conclude that taking action to demand systems serve you is useless. But it's only useless if we collectively believe it is useless. This is what I mean when I say that cynicism is malignant. The more people believe it, the more true it is.
- Chris2048 7mo agoHow does someone with a mere $10 stake have the opportunity to contribute to the cause of a $10mil disaster? Realistically, they'd have to be far more connected to the event, and as such, far more exposed to some kind of risk.
- haritha-j 7mo agoPessimistically, i imagine that's what they meant by "enormous asymmetry between the cost to create/build and the cost to destroy". Like its a lot easier to destroy an art piece in a museum than to create one.
- Chris2048 7mo agoThat simply describes entropy. I don't know what the example of someone putting a wager on an event represents.