[extropy-chat] Re: Formulating a bet

[Robin Hanson]

On 3/26/2005, Brett Paatsch wrote:
>>>You can bet on anything you can get judges to decide, which is
>>>pretty much anything.  The question is how well that judge
>>>decision correlates with the real dispute you are having.
>>seems to me equivalent of setting up a bet with a panel of judges
>>who might be Muslims or lunatics or might not, testing the assertion
>>that men who die faithful obtain the services of 72 virgins, .....
>
>Do you think that there are issues involved that are outside the
>domains of science, logic and language?  If so I'd like to know
>what you think those are? ...  the question "can cryonics work?" is not
>at all a stupid one. ... why they would think that it would
>be excessively difficult to find judges that could consider logical
>arguments from advocates on both sides of the case fairly.  ...

If people were fair, reasonable, logical, and rational no matter what
the topic or incentive context, well then they would just agree all the
time about most everything, and bets would be few and of little use.
The whole reason that betting markets are interesting is that people
are not usually reasonable, and so the incentives of a bet can make them
more reasonable.  But if people are usually unreasonable we can't just
give them random topics and expect them to judge fairly.  We have to
be selective and pick topics and contexts where even unreasonable people
would find it hard to judge very unfairly.

Before a horse race, it is easy to deceive yourself about which is the
better horse.  Picking random judges then, and they might easily make
biased judgments that favor themselves (like favoring the horse from
their state or with a name they like.)  After the race it is much harder
to deceive yourself about who won the race.  So, we can give people
incentives to be honest before the race by having them bet on what judges
will say afterward about who won the race.




Robin Hanson  rhanson at gmu.edu  http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326  FAX: 703-993-2323