FWIW I’d wildly guess this analysis underestimates by 1-2 orders of magnitude, see this comment thread.
A 2 order of magnitude would be a 6.7% chance of a nuclear exchange between NATO and Russia in the next month, and potentially more over the next year. This seems implausible enough to us that we would be willing to bet[1] our $15k against your $1k[2] on this, over the next month.
One might think that one can’t bet on a catastrophic event (or, in this case, a nuclear exchange between NATO and Russia in the next month). But in fact one can: the party that doesn’t believe in the catastrophic event mails the money to the party which does, which spends it now that money is worth more.
If the catastrophic event happens, the one who was right about this doesn’t have to repay. If the catastrophic event doesn’t happen, the party which was right is repaid with interest.
You’d think that this was equivalent to just getting a loan, and in fact has worse conditions. But this doesn’t disprove that this bet would have positive expected value, it only points out that the loan is even better, and you should get both.
This is on the higher end of your proposed range. But it is also worse than what we could get just exploiting prediction market inefficiencies. But we think it’s important that people could put in their money where their mouth is.
A 2 order of magnitude would be a 6.7% chance of a nuclear exchange between NATO and Russia in the next month, and potentially more over the next year. This seems implausible enough to us that we would be willing to bet[1] our $15k against your $1k[2] on this, over the next month.
One might think that one can’t bet on a catastrophic event (or, in this case, a nuclear exchange between NATO and Russia in the next month). But in fact one can: the party that doesn’t believe in the catastrophic event mails the money to the party which does, which spends it now that money is worth more.
If the catastrophic event happens, the one who was right about this doesn’t have to repay. If the catastrophic event doesn’t happen, the party which was right is repaid with interest.
You’d think that this was equivalent to just getting a loan, and in fact has worse conditions. But this doesn’t disprove that this bet would have positive expected value, it only points out that the loan is even better, and you should get both.
This is on the higher end of your proposed range. But it is also worse than what we could get just exploiting prediction market inefficiencies. But we think it’s important that people could put in their money where their mouth is.
That’s why it was my upper bound. I too think it’s pretty implausible. How would you feel about a bet on the +1 OOM odds?