Oh, thanks for the pointer. I confess I wish Robin was less terse here.
I’m not sure I even understand the claim, what does it mean to “recover interest rates”? Is Robin claiming any such bet will either
Have payoffs such that [the person receiving money now and paying money later] could just take out a loan at prevailing interest rates to make this bet; or
Have at least one party who is being silly with money?
...oh, I think I get it, and IIUC the idea that fails is different from what I was suggesting.
The idea that fails is that you can make a prediction market from these bets and use it to recover a probability of apocalypse. I agree that won’t work, for the reason given: prices of these bets will be about both [probability of apocalypse] and [the value of money-now versus money-later, conditional on no apocalypse], and you can’t separate those effects.
I don’t think this automatically sinks the simpler idea of: if Alice and Bob disagree about the probability of an apocalypse, they may be able to make a bet that both consider positive-expected-utility. And I don’t think that bet would necessarily just be a combination of available market-rate loans? At least it doesn’t look like anyone is claiming that.
Oh, thanks for the pointer. I confess I wish Robin was less terse here.
I’m not sure I even understand the claim, what does it mean to “recover interest rates”? Is Robin claiming any such bet will either
Have payoffs such that [the person receiving money now and paying money later] could just take out a loan at prevailing interest rates to make this bet; or
Have at least one party who is being silly with money?
...oh, I think I get it, and IIUC the idea that fails is different from what I was suggesting.
The idea that fails is that you can make a prediction market from these bets and use it to recover a probability of apocalypse. I agree that won’t work, for the reason given: prices of these bets will be about both [probability of apocalypse] and [the value of money-now versus money-later, conditional on no apocalypse], and you can’t separate those effects.
I don’t think this automatically sinks the simpler idea of: if Alice and Bob disagree about the probability of an apocalypse, they may be able to make a bet that both consider positive-expected-utility. And I don’t think that bet would necessarily just be a combination of available market-rate loans? At least it doesn’t look like anyone is claiming that.