I considered prediction markets, but expect them to have approximately zero impact on the outcomes of projects.
On this, I disagree. A working prediction market makes it much harder to lie to the backers (and harder for proponents to lie to themselves) about probability of success and magnitude of impact.
This is because almost all megaprojects are bad, everyone knows almost all of them are bad, and few people involved with them are trying to behave differently.
On this, I somewhat agree. Which then brings the question “why would anyone buy shares in them”?
A working prediction market makes it much harder to lie to the backers (and harder for proponents to lie to themselves) about probability of success and magnitude of impact.
I agree with this. The reason I do not find it persuasive in the case of megaprojects is that in the current environment backers and proponents are motivated to lie, and the only people who are motivated to find the truth (private creditors) already do the best job of seeking it. As a result, the only group that would listen to the prediction market is also the group which experiences the lowest marginal gain from it. That being said it would still be a good idea to have a prediction market, because even a tiny improvement to the sector would be large in absolute terms.
The prediction market changes the information available to the participants, but does nothing to change their incentives. By contrast, a legal construct you can sell shares of is a restructuring of the incentives at the same time that it changes the information available.
On this, I disagree. A working prediction market makes it much harder to lie to the backers (and harder for proponents to lie to themselves) about probability of success and magnitude of impact.
On this, I somewhat agree. Which then brings the question “why would anyone buy shares in them”?
I agree with this. The reason I do not find it persuasive in the case of megaprojects is that in the current environment backers and proponents are motivated to lie, and the only people who are motivated to find the truth (private creditors) already do the best job of seeking it. As a result, the only group that would listen to the prediction market is also the group which experiences the lowest marginal gain from it. That being said it would still be a good idea to have a prediction market, because even a tiny improvement to the sector would be large in absolute terms.
The prediction market changes the information available to the participants, but does nothing to change their incentives. By contrast, a legal construct you can sell shares of is a restructuring of the incentives at the same time that it changes the information available.
One way the stock price matters for executives is that their bonuses are linked to the stock price.
If you start a megaproject you could link executive bonuses on the project to the probability on the Augur market.
Linking it to bonuses would also automatically push some liquidity into the market.