Alex Tabarrok advocates for crowdfunding systems with *Refund Bonuses*. I think this might be a natural occurrence of a money pump against Causal Decision Theory pledgers

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Essentially, his version of Kickstarter has Refund Bonuses. His rationale is that there’s little benefit to investigate or promote a probably-failing crowdfunding project, because that costs you time, so that could put projects in a bad equilibrium where no one will strive to believe in them tomorrow because nobody believes in them today. So Refund Bonuses breaks the vicious cycle by compensating that time-cost, by giving out a bonus to anyone who pledged, if and only if the project fails to meet its funding threshold. A paraphrasing of it is: It sends a strong signal that the project is confident that it will succeed, so if you would have been doubtful, you shouldn’t be now.
And, for a worthy project, the refund bonus would rarely need to actually be paid, so it costs little to offer them.

Hearing about this, something occurred to me. I think this might be a natural dutch-book against (trap, for) CDT (Causal Decision Theory. Background: https://​​​​p/​​logical_dt/​​ ).

The vice of a CDT agent is that it sometimes cannot anticipate that the decisions of other CDT agents will be entangled with its own decisions.

It’ll go like this: An opportunistic CDTer might decide to look for campaigns that will fail, so that they can extract refund rewards. They watch the market for a bit, develop a sense of the patterns of failure and convince themselves of a strategy.

A bunch of other CDTers do the same thing and develop mostly the same strategies.

This turns into a game of chicken.

But CDT consistently underestimates the correlation of its decisions with those of other CDT agents, because it cannot use its own decision as evidence about others’ decisions.

I’m not completely sure how much CDT underestimates by.

But if it’s underestimating by a lot, many of its projected failing campaigns will be driven by cynical pledges unto success. This would run against my usual intuitions about CDT… Usually, it would underfund public goods, it appears to me that refund bonuses would lead it to overfund public goods. I guess the common factor is that in both cases it’s failing a collective action problem.

Very few of the CDTers would end up making money by fishing for failure payouts. The live players in this game admit that the CDT way of thinking has serious issues and they stop using it in this context (They might not know the LDT angle, so they’ll just say things like “It’s a fool’s game. It’s gambling.” and at their best “This market is entirely anti-inductive.”), but a dead player, who has no meta-rationality, may trudge on, always expecting to score, never seeing the invisible acausal logical threads connecting it to the mechanism of the trap.