Re: (Long) Re: AltInst: Vote on Values, But Bet on Beliefs

From: Robin Hanson <>
Date: Sun Jul 30 2000 - 12:22:41 PDT

Tom Breton wrote:

> Thank you for publishing that paper. I found it very interesting.

You are most welcome.

> "Democracy mite become unstable" seems overly theoretical in both
> objection and answer - I suppose that can't be helped. I notice that
> the answer does not consider the possibility of direct democracy,

That is what I had in mind with the end of my answer, but I'll make itmore

> "Expressive voting could still cause problems". The answer isn't very
> convincing: If it's a problem, we mite find solutions.

I don't have a convincing answer, but I still want to acknowledge the problem.

> the sort of special-interest voting that Libertarians like to call "4 wolves and
> a
> sheep voting on what to have for dinner". ISTM this would be just as
> much an issue in futarchy.

This is usually described as due to an information problem -- special
interestsclaim that their special priviledges are in the common interest, and
do not know otherwise. E.g., import tariffs and immigration limits.

> "People could buy policy via betting markets". I notice your answer
> centers on a specific case, dealing with a stadium where insiders try
> to boy a "favorable impression" and then profit buy selling before the
> bubble bursts. ISTM this doesn't really address the case of what I
> call "short circuits" where the policy at issue illegitimately creates
> its own funding. One could imagine other cases whose effect on policy
> had the effect of funneling money to themselves, eg a defense
> contractor bidding on a re-armament policy.

Actually I did have in mind say stadium contractors who would benefit
directly from a stadium being built. That seems like defense contractors.

> In that case, the profit
> they get from creating policy affects the equilibrium price, so they
> may win even tho they take a small loss in the market. Whereas the
> tax money spent is spread over hundreds of millions, so no one
> taxpayer has strong incentive to move the price the other way.
> So ISTM you need to address a stronger case example.

I was arguing that they couldn't even move the price by taking a small loss.And it
isn't taxpayers I'm counting on, its speculators.

> "You need a way to tell if a proposal was implemented". You appeal to
> contract law, but it's not clear that policy writers would have
> incentive to be as clear as possible, which contract writers do.

If you write a sloppy contract, your prospective partner (eg customer)may balk.
Similarly, speculators may not endorse your proposal if
they don't know what exactly it is.

> "Risk premiums ... it's one more opportunity for gerrymandering

Yeah - I should emphasize that we place a premium on simplicity.

> All in all, I'm very interested in the idea, and I'd like to see if we
> can find answers for the weaker points.

I'd like to see this as well :-).Thanks again for your thoughtful consideration of
the idea.

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Received on Sun Jul 30 12:35:43 2000

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