Re: poly: Idea Futures, some questions

Nick comments on Idea Futures:
>...There are however some point on which
>I'd like to hear Robin's and other people's comments:
>Suppose for some heavily traded claim there is a single research team
>who has a good chance of settling the claim. ... infiltrate the group,
>... protect itself from this prying ..., imposing another cost to
>society.

This problem is common to all post-production competitive selling of
information. It is far from unique to idea futures.

>When they settle the issue, ... they would
>prefer to make it look as if the increased demand was due to some
>irrational public fad rather then the result of new information.

This problem is common to all sales. "Come to Crazy Carl's Cars;
we have to be crazy to sell stuff this cheap." Every seller wants
you to think you've tricked him into an irrationally great deal.
Makes you forget to ask "what's he know that I don't?"

>new experimental technique or research methodology that is not such that
>it can be traded on the IF market. Rather than publishing it as soon
>as possible, as they would today, they might prefer to keep it secret
>for a very long time, in order to use it to settle many issues, ...
>an incentive to hide important information rather than to publish it,
>again inflicting a cost on society.

1. Idea futures does not prevent people from publishing.
2. Academics sit on information all the time now, even for decades. They
do *not* publish everything they know. Most people who work with big
data sets never make those data sets freely available; they just keep
publishing articles based on those data sets, or they offer the data for
sale to other researchers. Similarly, people sit on theoretical insights
which aren't really marketable as a good publication.

>One worry that I'm still very vague about is that of asymmetric
>information. A.i. is known to destroy markets. The inefficient
>market of used cars is used as an example in many economics
>textbooks. Now, the idea futures would in many cases be a market with
>highly asymmetric informations. Wouldn't this create a analogous
>problem as when people want to buy used cars?

Asymmetric info is just a problem in general, it's not a problem with
markets per se. When asymmetric info is a feature of some environment, it
makes it harder to design good institutions for that context. The best
possible institution may not be as good as with symmetric info. But
that says nothing about whether market-based institutions will work
better or worse than other types of institutions.

>A last question. One of the benefits of IF is supposed to be that it
>enables a way for funders to fund questions rather than researchers.
>Could not this particular benefit be achieved equally well though
>science prizes? If so, then the funding of questions is not an
>advantage of creating a market of IF, since such funding is available
>today without IF.

I've described the money offered in subsidized idea futures markets as
"information prizes" (http://hanson.berkeley.edu/infoprize.html).
There are many kinds of prizes, and I propose this as a new kind.
Often one knows what question one would like answered, but it's not
clear what ordinary "accomplishment" prizes would best promote answering
that question.

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Mon May 18 23:26:09 1998