#3Questions: the future of Prediction Markets, with Robin Hanson.
This week on #3Question, we hear from Robin Hanson, a renowned economist, an Associate Professor of Economics at George Mason University, a Research Associate at the Future of Humanity Institute and an author of the Overcoming Bias blog. Robin originated the concept of a ‘Great Filter’ and, most importantly for Amoveo, he came up with the form of government called Futarchy and wrote several papers about using prediction markets to make decisions for communities. Amoveo utilises this concept in its governance model.
Additionally, Amoveo is a platform for hosting futarchy markets to make decisions for any community. For instance, any town could use Amoveo futarchy to decide which park to put a swingset in for children to play on.
Here’s what Robin had to say.
Question 1: What do you think the future of Prediction Markets looks like?
Robin: ‘Prediction markets are a technology with an enormous potential, but a potential that could sit unrealized for a long time. Eventually they will become very widely used for organization and personal forecasts.’
Question 2: If or when mass-adopted, what do you think will be their main use-case?
Robin: ‘Consider an analogy with cost accounting (CA), where there are two possible equilibria. In a world without CA, proposing to use CA in some context says “someone is stealing here, lets find out who”. But in a world with CA proposing to NOT use CA in some context says “could we just let folks steal here & not keep track”. Similarly, in a world that doesn’t use PM when you propose to use them that says “I hear a lot of bullshit here, we need something to cut through that”. But in a world that uses PM all the time, suggesting to not use one would say “let’s not have accurate forecasts on this topic please, as that will look bad to some of us”.’
Question 3: What are the current challenges that need to be solved?
Robin: ‘Most innovation combines elegant simple ideas with lots of details that have to be worked out for the simple idea to work in real contexts. That working out is mostly via trial and error. PM have their elegant idea, but still need lots of trial and error in real contexts to see what details can allow them to avoid the severe political disruptions that they often cause today. PM have a habit of contradicting powerful people, and being proven right, which embarrasses those people. Who then get PM killed.’
We would like to thank Robin Hanson for taking his time to answer our questions.
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