The Apocalypse Bet


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Eliezer_Yudkowsky

A problem with betting on engineered superplagues, physics disasters, nanotechnological warfare, or intelligence explosions of both Friendly and unFriendly type, is that all these events are likely to disrupt settlement of trades (to put it mildly).  It's not easy to sell a bet that pays off only if the prediction market ceases to exist.

And yet everyone still wants to know the year, month, and day of the Singularity.  Even I want to know, I'm just professionally aware that the knowledge is not available.

This morning, I saw that someone had launched yet another poll on "when the Singularity will occur".  Just a raw poll, mind you, not a prediction market.  I was thinking of how completely and utterly worthless this poll was, and how a prediction market might be slightly less than completely worthless, when it occurred to me how to structure the bet - bet that "settlement of trades will be disrupted / the resources gambled will become worthless, no later than time T".

Suppose you think that gold will become worthless on April 27th, 2020 at between four and four-thirty in the morning.  I, on the other hand, think this event will not occur until 2030.  We can sign a contract in which I pay you one ounce of gold per year from 2010 to 2020, and then you pay me two ounces of gold per year from 2020 to 2030.  If gold becomes worthless when you say, you will have profited; if gold becomes worthlesss when I say, I will have profited.  We can have a prediction market on a generic apocalypse, in which participants who believe in an earlier apocalypse are paid by believers in a later apocalypse, until they pass the date of their prediction, at which time the flow reverses with interest.  I don't see any way to distinguish between apocalypses, but we can ask the participants why they were willing to bet, and probably receive a decent answer.

I would be quite interested in seeing what such a market had to say.  And if the predicted date was hovering around 2080, I would pick up as much of that free money as I dared.


EDIT:  Robin Hanson pointed out why this wouldn't work.  See comments.