An incentive structure for scalable trusted prediction market resolutions
We might want to make a trustable committee for resolving prediction markets. We might be worried that individual resolvers might build up reputation only to exit-scam, due to finite time horizons and non transferability of reputational capital. However, shareholders of a public company are more incentivized to preserve the value of the reputational capital. Based on this idea, we can set something up as follows:
Market creators pay a fee for the services of a resolution company
There is a pool of resolvers who give a first-pass resolution. Each resolver locks up a deposit.
If an appeal is requested, a resolution passes up through a series of committees of more and more senior resolvers
At the top, a vote is triggered among all shareholders
It’s amazing how many proposals for dealing with institutional distrust sound a lot like “make a new institution, with the same structure, but with better actors.” You lose me at “trustable committee”, especially when you don’t describe how THOSE humans are motivated by truth and beauty, rather than filthy lucre. Adding more layers of committees doesn’t help, unless you define a “final, un-appealable decision” that’s sooner than the full shareholder vote.
the core of the proposal really boils down to “public companies have less incentive to cash in on reputation and exit scam than individuals”. this proposal is explicitly not “the same structure but with better actors”.
An incentive structure for scalable trusted prediction market resolutions
We might want to make a trustable committee for resolving prediction markets. We might be worried that individual resolvers might build up reputation only to exit-scam, due to finite time horizons and non transferability of reputational capital. However, shareholders of a public company are more incentivized to preserve the value of the reputational capital. Based on this idea, we can set something up as follows:
Market creators pay a fee for the services of a resolution company
There is a pool of resolvers who give a first-pass resolution. Each resolver locks up a deposit.
If an appeal is requested, a resolution passes up through a series of committees of more and more senior resolvers
At the top, a vote is triggered among all shareholders
It’s amazing how many proposals for dealing with institutional distrust sound a lot like “make a new institution, with the same structure, but with better actors.” You lose me at “trustable committee”, especially when you don’t describe how THOSE humans are motivated by truth and beauty, rather than filthy lucre. Adding more layers of committees doesn’t help, unless you define a “final, un-appealable decision” that’s sooner than the full shareholder vote.
the core of the proposal really boils down to “public companies have less incentive to cash in on reputation and exit scam than individuals”. this proposal is explicitly not “the same structure but with better actors”.