prediction market + future depends on the voters’ actions = moral hazard
I guess this is an argument against prediction markets in general, unless the results are independent on what voters do (or a voter activity aimed to change the outcome is prosecuted as a fraud).
We can see this in politics. The Blue Party says that a major Green Party policy will fail. When the Green Party enacts it, the Blues sabotage it, then use its failure as evidence that Blue ideology is correct.
Likewise, partisan pollsters run polls designed to exaggerate support for their preferred candidate, under the theory that predictions of success can cause success.
It also seems to me that any form of prediction market has moral hazard. They’ve been criticized as assassination markets, and any questions that have anything to do with the behavior of an individual person set up an incentive for murder.
Hence, the key question is not whether moral hazard exists, but whether the tradeoffs are acceptable.
It’s hard to say if the entire world should be run by prediction markets. But I think we should be experimenting more with forecasting and prediction markets at more local levels.
The Blue Party says that a major Green Party policy will fail. When the Green Party enacts it, the Blues sabotage it, then use its failure as evidence that Blue ideology is correct.
Can you give an example? What is the difference between “sabotaging” a policy and simply opposing a policy you don’t support?
Sure. Republicans couldn’t afford to repeal the Affordable Care Act (I’m assuming you’re American, let me know if not and I’ll explain further), because it was too popular even among republicans.
One of the gears that makes it work is the individual mandate, a tax penalty for not having health insurance. This penalty was meant to incentivize young healthy people to sign up for health insurance, effectively subsidizing the insurance policies of the old and sick. The Republicans repealed this component, which should have the effect of gutting the revenue stream that makes the ACA work, driving up the cost of insurance.
Opposing the policy would look like Republicans repealing the ACA. Sabotaging it looks like keeping it in place, but repealing a tax penalty that effectively funds it, making it untenable in the long run as insurance prices spike. They can blame this on Democrats, arguing that a big government insurance program was bound to fail, while taking credit for the tax cut.
The dynamic I’m describing is meant only to illustrate the difference between political opposition and sabotage, not a serious piece of contemporary political analysis.
To define them more generally, political opposition is about making the consequences of your opposing actions clear.
Political sabotage is hiding the consequences of your opposing actions.
prediction market + future depends on the voters’ actions = moral hazard
I guess this is an argument against prediction markets in general, unless the results are independent on what voters do (or a voter activity aimed to change the outcome is prosecuted as a fraud).
We can see this in politics. The Blue Party says that a major Green Party policy will fail. When the Green Party enacts it, the Blues sabotage it, then use its failure as evidence that Blue ideology is correct.
Likewise, partisan pollsters run polls designed to exaggerate support for their preferred candidate, under the theory that predictions of success can cause success.
It also seems to me that any form of prediction market has moral hazard. They’ve been criticized as assassination markets, and any questions that have anything to do with the behavior of an individual person set up an incentive for murder.
Hence, the key question is not whether moral hazard exists, but whether the tradeoffs are acceptable.
It’s hard to say if the entire world should be run by prediction markets. But I think we should be experimenting more with forecasting and prediction markets at more local levels.
Can you give an example? What is the difference between “sabotaging” a policy and simply opposing a policy you don’t support?
Sure. Republicans couldn’t afford to repeal the Affordable Care Act (I’m assuming you’re American, let me know if not and I’ll explain further), because it was too popular even among republicans.
One of the gears that makes it work is the individual mandate, a tax penalty for not having health insurance. This penalty was meant to incentivize young healthy people to sign up for health insurance, effectively subsidizing the insurance policies of the old and sick. The Republicans repealed this component, which should have the effect of gutting the revenue stream that makes the ACA work, driving up the cost of insurance.
Opposing the policy would look like Republicans repealing the ACA. Sabotaging it looks like keeping it in place, but repealing a tax penalty that effectively funds it, making it untenable in the long run as insurance prices spike. They can blame this on Democrats, arguing that a big government insurance program was bound to fail, while taking credit for the tax cut.
The dynamic I’m describing is meant only to illustrate the difference between political opposition and sabotage, not a serious piece of contemporary political analysis.
To define them more generally, political opposition is about making the consequences of your opposing actions clear.
Political sabotage is hiding the consequences of your opposing actions.