How to place a bet on the end of the worldpost by DirectedEvolution (AllAmericanBreakfast) · 2022-04-20T18:24:18.212Z · LW · GW · 12 comments
Edit: This post is about a practical method for structuring a bet. It's not on how to extract information about people's true confidence levels based on the betting odds.
In brief, Bryan assigns a lower probability than Eliezer to the world ending by January 1, 2030. Of course, if the world ends by that date, Eliezer can't collect his winnings. So Bryan prepays Eliezer now, and Eliezer pays him back if he loses the bet.
This works for friendly bets. Bryan points out that they need to account for interest. To that, I'd add both risk and opportunity cost. Commenters have changed my mind, however, about whether we can really learn much about the participants' confidence levels from such a bet. I elaborate on this in the comments.
Here's the relevant part of the transcript, under "Bryan's Betting Record" starting at 1:48:19 in the podcast episode.
Bryan Caplan: Let’s see. Well, I’ve already done one huge [bet against the effective altruism community], and this is that machines are going to kill us — or at least do something terrible to us — in the medium term. So I literally have an end-of-the-world bet with Eliezer Yudkowsky.
Rob Wiblin: Oh wow. I didn’t know that.
Bryan Caplan: Yeah. Which many people believe cannot be made, but it’s super easy. The person who disbelieves in the end of the world just pays the money now. And then if the world does not end, the loser pays back with whatever the odds are.
Rob Wiblin: I can’t believe I didn’t think of that.
Bryan Caplan: Yeah. So Eliezer, we actually have a bet. It takes a little effort to understand the bet, because his view is so specific. He said, “Look, I want a bet on there will no longer be any human beings on the surface of the Earth on January 1, 2030.” I was willing to give him, like, “How about all of human extinction?” — “No, no, no, no, no. There could still be humans in mine shafts. That’s OK. But not the surface of the Earth.” And I’m like, “All right. If that’s such a big deal to you, fine, we’ll make it the surface of the Earth, whatever.” But yes.
Bryan Caplan: So anyway, we have a bet, where I don’t remember the exact odds. It might be just like two-to-one. And I prepaid, so implicitly there’s interest. So it’s not as good as it seems.
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