[extropy-chat] Noisy future day (was: silent night)

[Harvey Newstrom]

On Dec 22, 2004, at 6:21 PM, Robin Hanson wrote:

> Well things are looking the best they've looked in the fifteen years 
> I've been at this.  The CFTC is considering making them more legal - I 
> was just at conference on this.  And a few dozen companies are 
> experimenting with internal markets.

Robin, do futures markets only work as a form of betting?  I know that 
in most markets, you actually purchase a product or an option to buy a 
product at a set price.  If the price goes up or down, you win or lose 
as its value changes.  That's the basic function of ownership.  But 
aren't futures markets just betting?  You have no property.  You bet on 
an outcome and someone else pays in cash if you win.  No ownership or 
value changes occur.  Is this the fundamental problem with getting 
futures markets legalized?  Or am I missing the point here?  (I have 
not specifically researched the legality of futures markets myself.)

If ownership does not occur, then there might be a number of other 
methods other than a buyer/seller market to implement such an idea.  
Would any system that rewards good predictions and punishes bad 
predictions be useful?  If people could make money with good 
predictions and lose money with bad predictions, would that be "close 
enough" to a futures market?

--
Harvey Newstrom <HarveyNewstrom.com>
CISSP, ISSAP, ISSMP, CISA, CISM, IAM, IBMCP, GSEC