Won’t conditional prediction markets give rich people more ways to influence policy? Let’s say the people of Examplestan have a large underclass who live paycheck to paycheck and a small upperclass who gets their money from inheritance. The government is thinking of introducing a bill that would make their tax revenue come less from paychecks and more from inheritance. Democracy advocates want to put it to a vote, but a group of futarchy lobbyists convince the government to run a conditional prediction market instead.
The market question is “If we replace the paycheck tax with an inheritance tax, will welfare increase?”. The large underclass has almost no money to bet that it will, while the small upperclass bets a large chunk of their money that it won’t. Predictably, more money is betted on it not increasing welfare and when the market closes, everyone gets their money back and the government decides not to implement it.
Powerful people are always going to have more influence (which will sometimes be good and sometimes be bad). The difference with futarchy is it incentivizes each individual to set aside their class interests because their individdual interests are in the opposite direction. The most profitable cases on prediction markets are ones where there is a large amount of irrational buyers on the other side.
But is it in your individual interest? Is making enemies of your friends and family while losing a guaranteed lifelong stream of income for you and your children really worth it for the possibility of having a one time large payout? What about with different probabilities? What if you think the policy has a 51% chance of helping the poor and a 49% chance of doing nothing. This would be a fantastic policy to try but even without coordination mechanisms like dominance assurance contracts, I doubt a self interested rich person would sacrifice their social network and lifelong stream of income for a 51% of having a one time large payout (actually less than 51% since it probably won’t be implemented due to the conditional prediction market).
I assume you could trade privately, in the same way that the stock market and many prediction markets currently work. So there wouldn’t need to be any negative social consequences. Perhaps regulators and the exchange could see your identity for compliance purposes.
Allowing anonymous predictions causes a whole bunch of other problems. But even we could somehow get rid of coordination mechanisms like: dominance assurance contracts, the fear of losing your social network, or psychological loyalty towards your ingroup, is it really in your own interest to lose the source of income for you and your children for a <51% chance of a one time payout, or will the outcomes of conditional prediction markets be biased towards the interests of rich people?
Won’t conditional prediction markets give rich people more ways to influence policy?
Let’s say the people of Examplestan have a large underclass who live paycheck to paycheck and a small upperclass who gets their money from inheritance. The government is thinking of introducing a bill that would make their tax revenue come less from paychecks and more from inheritance. Democracy advocates want to put it to a vote, but a group of futarchy lobbyists convince the government to run a conditional prediction market instead.
The market question is “If we replace the paycheck tax with an inheritance tax, will welfare increase?”. The large underclass has almost no money to bet that it will, while the small upperclass bets a large chunk of their money that it won’t. Predictably, more money is betted on it not increasing welfare and when the market closes, everyone gets their money back and the government decides not to implement it.
Powerful people are always going to have more influence (which will sometimes be good and sometimes be bad). The difference with futarchy is it incentivizes each individual to set aside their class interests because their individdual interests are in the opposite direction. The most profitable cases on prediction markets are ones where there is a large amount of irrational buyers on the other side.
But is it in your individual interest? Is making enemies of your friends and family while losing a guaranteed lifelong stream of income for you and your children really worth it for the possibility of having a one time large payout?
What about with different probabilities? What if you think the policy has a 51% chance of helping the poor and a 49% chance of doing nothing. This would be a fantastic policy to try but even without coordination mechanisms like dominance assurance contracts, I doubt a self interested rich person would sacrifice their social network and lifelong stream of income for a 51% of having a one time large payout (actually less than 51% since it probably won’t be implemented due to the conditional prediction market).
I assume you could trade privately, in the same way that the stock market and many prediction markets currently work. So there wouldn’t need to be any negative social consequences. Perhaps regulators and the exchange could see your identity for compliance purposes.
Allowing anonymous predictions causes a whole bunch of other problems. But even we could somehow get rid of coordination mechanisms like: dominance assurance contracts, the fear of losing your social network, or psychological loyalty towards your ingroup, is it really in your own interest to lose the source of income for you and your children for a <51% chance of a one time payout, or will the outcomes of conditional prediction markets be biased towards the interests of rich people?