tag:blogger.com,1999:blog-3829599.post113188290157962715..comments2024-01-28T00:20:40.933-08:00Comments on Agoraphilia: The Prediction Exchange Legalization Act of 2006Unknownnoreply@blogger.comBlogger13125tag:blogger.com,1999:blog-3829599.post-1132176408789114642005-11-16T13:26:00.000-08:002005-11-16T13:26:00.000-08:00Most of the proponents will argue (as I do) that t...Most of the proponents will argue (as I do) that the value of disseminating information outweighs considerations of making a fair playing field. As long as everyone knows that insider trading is encouraged (though malfeasance or dereliction of duty remains actionable) they should be able to anticipate and prepare for the actions of people with better access to information. The idea that the market is a lottery with only ignoramuses allowed to participate is a very bad one.Chris Hibberthttps://www.blogger.com/profile/12235621011708498622noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132110032210205642005-11-15T19:00:00.000-08:002005-11-15T19:00:00.000-08:00Hi Guys, so who's going to sponsor the bill? Dorg...Hi Guys, so who's going to sponsor the bill? Dorgan, right? <BR/><BR/>Seriously, this might be a good idea insofar as it is would remove the legislative and regulatory uncertainty hanging over the development of prediction markets. Investors will be much more willing to fund the creation of such exchanges without the threat of having the rug pulled-out from under them. (Recall how stock trading exploded in New York in the 1800s after the institution of limited sharedholder liability.. people tend to overestimate small risks, etc) But -- although the CFTC has so far opted against considering the interesting prediction contracts as "commodities", if they see this proposal move forward, what is to stop them from changing their minds? To what extent does the label of "certificate", etc actually do any work in eliding all of the existing security and futures-related US code?<BR/><BR/>The "sporting event" reference that Chris Masse is so enamored with seems to be the current manifestation of the "public good" desire, which is its own sort of "marketing" -- targeting the legislators. Assuming that you gentlemen are going ahead with this, maybe some rationale such as "to ensure that the U.S. leads the world in financial innovation and flexibility" should be also included. At any rate, the precise clarification/differentiation needs to be offered in the bill, and this would be the main task. <BR/><BR/>Lastly, where does everyone stand on the "insider" issue? Your prediction markets are meant to provide useful price signals to researchers, and so the foremost experts' insights are desirable , but when less-informed participants actually lose money to researchers influencing the resolution of the contract, they are going to be something less than happy, and I'm not sure that's a tenable situation. Where exactly is the line drawn? This needs to be ironed-out.<BR/><BR/>Good luck, Jason RuspiniJason Ruspinihttps://www.blogger.com/profile/03037007850857235550noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132077296464484932005-11-15T09:54:00.000-08:002005-11-15T09:54:00.000-08:00The best examples of science claims are at ideafut...The best examples of science claims are at ideafutures.com. This is a play money market, and it's all run by volunteers and the participants, but the science claims are well thought out. People spend a fair amount of time getting the terms of the claims right so that by the due date, nearly everyone is in agreement as to whether the claims are true or false.<BR/><BR/>Here's a claim about <A HREF="http://www.ideosphere.com/fx-bin/Claim?claim=CO2LVL" REL="nofollow">Carbon Dioxide levels</A>.<BR/><BR/>You can find more claims <A HREF="http://www.ideosphere.com/fx-bin/ListClaims" REL="nofollow">here</A>. (Choose something under Science and Technology.)Chris Hibberthttps://www.blogger.com/profile/12235621011708498622noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132014926820833422005-11-14T16:35:00.000-08:002005-11-14T16:35:00.000-08:00FYI I'm taking the current reality of such markets...FYI I'm taking the current reality of such markets as a persuasive argument against lunacy thereof. Just having a hard time imagining the science claims.MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132014612285104582005-11-14T16:30:00.000-08:002005-11-14T16:30:00.000-08:00Sorry: wasn't responding to your comment, Tom, but...Sorry: wasn't responding to your comment, Tom, but Chris's. I think you and I were posting at the same time.MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132014477985236472005-11-14T16:27:00.000-08:002005-11-14T16:27:00.000-08:00I went to wikipedia and found it helpful. Thanks. ...I went to wikipedia and found it helpful. Thanks. I could use an example of the kind of science claims that are envisioned for such a market. Are claims intrinsically date-oriented: e.g. "No cure for cancer before October 12, 2007" Or do you want things like "Drinking tomato juice reduces the risk of cancer." Would a claim that vague be allowed? How about "Drinking more than two liters per day of fluids reduces the risk of cancer." Can anybody make as vague a claim as the market will bear? It seems you'll have competing standards of claim with regard to any area of science. The NYSE doesn't have that kind of power on the kind of bets people can make.MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132014136241055902005-11-14T16:22:00.000-08:002005-11-14T16:22:00.000-08:00In addition to the Wikipedia article suggested by ...In addition to the Wikipedia article suggested by Chris, I recommend simply googling "idea futures" to you, Murky. You would surely find the many carefully written explanations thereby readily put at your disposal more convincing and clear than any brief and ad hoc writing I'd offer, here.Tom W. Bellhttps://www.blogger.com/profile/02790351458154066358noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132003895684525452005-11-14T13:31:00.000-08:002005-11-14T13:31:00.000-08:00Judging is not as hard as you (murky thoughts) see...Judging is not as hard as you (murky thoughts) seem to think. At ideafutures.com (a play money market), volunteers agree to judge claims, and their names are listed so the other participants can take that into account. Few judgements are controversial. InTrade.com (a real money market) doesn't say who judges, but they stick to claims with pretty objective outcomes. Tom's proposal says judging policy is up to the operator, and the customers can decide who has the best policy. Most of the commercial exchanges do their judging in-house without attribution. <BR/><BR/>There's a good article at wikipedia.org.<BR/><BR/>The questions would probably be on general issues in science rather than particular experiments or scientists. Sabotaging a particular experiment would muddy the evidence, but that can already happen, and many scientific questions are relevant to public policy issues that people care about.Chris Hibberthttps://www.blogger.com/profile/12235621011708498622noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132001140353858422005-11-14T12:45:00.000-08:002005-11-14T12:45:00.000-08:00There's already plenty unseemliness in science whe...There's already plenty unseemliness in science when all that's being competed for is prestige. Throw in money and you'd have espionage and vandalism. Things fail 99% of the in experimental science, and the other 1% of the time you don't know what the right outcome of an experiment looks like, so it could be impossible to detect or prove vandalism. You'd have to turn all research into a high-security, high-surveillance exercise. You'd probably end conferencing and preliminary information exchange as well. What's going to happen with peer review? Right now predictors compete for honor. Competing for money, who knows what competitors would do? I'm retreating to my first blush instinct and calling this lunacy, until and unless exceptionally well argued otherwise.MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132000472506441802005-11-14T12:34:00.000-08:002005-11-14T12:34:00.000-08:00Prediction judging seems like it would require som...Prediction judging seems like it would require something like the patent office. It would be administratively humungous, wouldn't it?MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1132000063434724252005-11-14T12:27:00.000-08:002005-11-14T12:27:00.000-08:00Huh. Do you have anything online in plain language...Huh. Do you have anything online in plain language about the scenario you're envisioning? I'm intrigued.MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1131995226620577542005-11-14T11:07:00.000-08:002005-11-14T11:07:00.000-08:00Yes and yes.Presumably, they could not meaningfull...Yes and yes.<BR/><BR/>Presumably, they could not meaningfully retard those outcomes without violating contract, tort, or property rights. They might badmouth the judgement of those who hold contradictory prediction certificates, but we should welcome that as part of an adversiarial process that tends towards truth.Tom W. Bellhttps://www.blogger.com/profile/02790351458154066358noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1131947826237289532005-11-13T21:57:00.000-08:002005-11-13T21:57:00.000-08:00What's the point? To incentivize forecasting? To c...What's the point? To incentivize forecasting? To capitalize desired outcomes? Wouldn't we be incentivizing half the people to prevent or retard the desired outcomes?MThttps://www.blogger.com/profile/02341704109256270557noreply@blogger.com