Practical ways to actualize our beliefs into concrete bets over a longer time horizon?

post by M. Y. Zuo · 2023-04-20T21:21:21.257Z · LW · GW · No comments

This is a question post.

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    1 Drake Morrison
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There are many excellently written posts and comments on LW that describe why turning vague beliefs into concrete action is valuable. Specifically, using bets as a highly effective strategy to signal through all the noise of the modern world. 

I've found myself nodding to these sentiments so many times that I've always wanted to set up such a bet myself. But the issue is how to make all the necessary details workable, legal, etc., when it's so rarely done.

For example, over a several decade long betting horizon, how would one enforce the results of the bet either way in the future?

 I've heard of irrevocable trusts but unsure what other legal vehicles  allow such a thing.

Here's a possible bet:

I believe P(doom)<50 years is ~ 0%. 

Counter-party believes P(doom)<50 years is approximately 100% 

I wager $500 USD,  distributed on the date of commitment as the counter-party would likely prefer it immediately

Counter-party wagers X on terms Y via mechanism Z.

Let's say 1:100 odds if confidence exceeds 99%

Counter-party wagers $50 000 USD (minus some discount rate for opportunity costs), that will self-adjust for future inflation (somehow?), on mirrored terms 50 years from today via mechanism Z.

And this is where I get quite unsure how to best go about things.

My best hunches so far are:

  1. that the counter party's wager will need to be in some kind of tangible assets (stocks, real property, bonds, etc...) instead of currency, to side-step worrying about 50 years worth of inflation.
  2. that the mechanism will have to be self-enforcing and foolproof to guarantee neither party or third party could mess around with it, in order to facilitate equal and mirrored terms.
  3. that mirrored and equal terms are quite necessary for any long range bet as most folks wouldn't bet large sums unless they are certain of its fairness. And the simplest way to achieve this is to make the terms literally identical (modulo a date difference).
  4. transaction costs should be paid by both parties, some immediately some at the future date, to align incentives. 

Answers

answer by Drake Morrison · 2023-04-21T01:52:16.587Z · LW(p) · GW(p)

I think what you are looking for is prediction markets [? · GW]. The ones I know of are:

  1. Manifold Markets - play-money that's easy and simple to use
  2. Metaculus - more serious one with more complex tools (maybe real money somehow?)
  3. PredictIt - just for US politics? But looks like real money?
↑ comment by M. Y. Zuo · 2023-04-21T04:17:11.081Z · LW(p) · GW(p)

There's no guarantee that they will actually pay out for a long term bet however, since there is no guarantee they will continue existing or honour their obligation, even if they accepted real money. Unless you know of some possibility?

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