Also, on the Petrov day market, let’s suppose the question had been “What % of Petrov Day will elapse before someone uses the big red button to take down Less Wrong’s frontpage for the rest of the day?” (“for the rest of the day” is the only change.) I would consider this reasonably unambiguous—if LW decides to bring the page back up because it was a “mistake” then it shouldn’t resolve yet. But I suspect that people would have bet on that nearly the same as the actual question, and your hypothetical user who saw the site was down at 10% would also have been burned. It’s still better to avoid the ambiguity, I agree, but the problem of traders being burned by details is still there even if you avoid ambiguity in the details.
This sort of thing happens in the financial markets too. I’m thinking of all the games that happen over credit-default-swaps, for example. It would be nice if we could magically reduce complexity to reduce the impact of these sorts of issues, but it’s a risk market participants are taking on by trading in the markets, and I think the value the markets provide is still clearly worth it (or else people wouldn’t be willing to trade in them)!
Also, on the Petrov day market, let’s suppose the question had been “What % of Petrov Day will elapse before someone uses the big red button to take down Less Wrong’s frontpage for the rest of the day?” (“for the rest of the day” is the only change.) I would consider this reasonably unambiguous—if LW decides to bring the page back up because it was a “mistake” then it shouldn’t resolve yet. But I suspect that people would have bet on that nearly the same as the actual question, and your hypothetical user who saw the site was down at 10% would also have been burned. It’s still better to avoid the ambiguity, I agree, but the problem of traders being burned by details is still there even if you avoid ambiguity in the details.
This sort of thing happens in the financial markets too. I’m thinking of all the games that happen over credit-default-swaps, for example. It would be nice if we could magically reduce complexity to reduce the impact of these sorts of issues, but it’s a risk market participants are taking on by trading in the markets, and I think the value the markets provide is still clearly worth it (or else people wouldn’t be willing to trade in them)!