The financial terms aren't good enough to entice me. Besides that…
Pretty much all of your weird explanations are too vague. In particular "[s]ome other explanation that's of this level of 'very weird'" is voids the whole thing. It'd be fine for a blog post, but not as a prediction resolution criteria.
"I reserve the right to appeal to the LW community. [I will not abuse this right]" is too vague too. The LW community is not a monolithic entity. I think you need to specify exactly how you plan to appeal to the LW community.
Nope. That's a separate bet. I'd happily bet against that (given good enough terms to overcome friction), but that's still originating from Earth.
Yes, I am implying that it's the only recourse allowed. Doing otherwise exposes me to asymmetric litigation risk, due to the extreme asymmetry of the bet amounts. I believe reputation is a sufficient motivator, given how much effort I've spend accumulating reputation on this website.
I respect your offer, but I'd need much better terms from you than from lc. Lc is someone I've interacted with before, and with whom I have established a level of trust.
Some thoughts:
Thank you for the offer. I think your offer is reasonable. The problem is that $10 is too low a price for "something I have to remember for a year". In theory, this could be fixed by increasing the wager amount, but $100k is above my risk limit for a bet (even something as simple as "the sun will rise tomorrow").
I think we've both established a market spread…which is kind of the point of this exercise. You get skin-in-the-game points for maxing out the market's available liquidity at a 0.1% price point.
There's a few other details I though of since my last comment ("mirror life" doesn't count, "shadow biosphere" don't count, and that I can exit the bet pre-resolution by paying repaying your initial payment pro-rated if I experience financial hardship (but not in response to evidence in your favor), and the condition that repayment depends solely on my honor and is not legally-enforcible[1]), but I don't think they're central to the problem of $10 is too high a price for one year of friction, even on a near-certain outcome.
The reason for this comes from the asymmetry of $10 vs $10k. It results in bad incentives. This condition would not be necessary if the numbers were closer (say, $3k vs $7k). ↩︎
I will accept under the following conditions:
Here's the short version: Suppose you think a prediction is mispriced but it's distant in the future. Instead of buying credits that pay out on resolution, you buy futures instead. You don't have to tie up capital, since payment is due on resolution instead of upfront. Your asset equals your liability. There is no beta.
Financial derivatives solve the shorttermism problem in traditional securities markets. If you use them in prediction markets, then they will (theoretically) do the exact same thing, by (theoretically) operating the exact same way. In practice, things get causal, and that's before you add leverage and derivatives.
One of the very anticapitalisms that I've noticed is that expertise doesn't always generalize out of domain, while money can stray into whatever domain it wants to.
Doesn't matter. It just means that prediction markets have to be sufficiently capitalized to work. A hedge fund isn't going to throw its smartest brains at a market with only $100 of total market capitalization.
"Predictive market derivatives" is on my list of things I should write about. What, precisely, do you mean by shorttermism? Do you mean how placing long-term bets in prediction markets ties up capital that could otherwise be put to use? (I think I understand you, but I want to be certain first.)
Financial derivatives work the same way in prediction markets as they do on existing securities markets. I already wrote a little bit about derivatives in existing securities markets, but am not sure that post fully answers your question.
My personal confidence of "no aliens" is so high it rounds to 100%. Placing a bet is basically just a loan with a weird "if aliens are real I don't get paid back" tacked on. The real question then is "at what rate am I willing to lend $X0,000 for 10 years to a stranger? If you can guarantee that I'll beat the stock market by 5% (conditional on no aliens) then I'm good to go, but the "guarantee" is very important. It needs to take into account things like bankruptcy on your end. I don't think our spread is wide enough to make that feasible. It'd take a lot of paperwork.
This is why we need real, formal, legal prediction markets, with derivatives. They would solve all of these problems.
Most bets I see are on the order of $10-$1000 which, according to the Kelly Criterion, implies negligible confidence. I'm willing to bet substantially more than that.
If we had a real prediction market with proper derivatives, low fees, high liquidity, reputable oracles, etcetera, then I'd just use the standard exchange, but we don't. Consequently, market friction vastly outweighs actual probabilities in importance.
Perhaps you mean that the other person should come up with the odds, and then you'll determine your bet amount using the Kelly criterion, assuming a 99% probability of winning for yourself.
Bingo. This is exactly what I mean. Thank you for clarifying. It is important to note that "probability of winning" is not the same as "probability of getting paid, and thus profiting". It's the latter that I care about.
There's a lot of stuff that scares me about that post.
Resolution Criteria
Weird Explanations
Some of these seem poorly phrased, from the perspective of a lawyer.
I know you don't intend most of these interpretations, but many of them are reasonable interpretations of your literal words. I worry that you're playing with fire here and that you could end up in some nasty disagreements when it comes to resolve your proposed bet.
Overall, I feel like you're conflating "standard atheist materialists" with mainstream science and mainstream beliefs. They all differ slightly from each other. Some of the stuff on your list I'd bet my life against, but other bullet points are (when read literally) technically true.
That said, I really like your willingness to place wagers (especially in contradiction to the mainstream narrative) so that you actually have skin in the game. This is the way. I don't want to discourage you.