This is our monthly place to discuss appropriate topics that haven’t appeared in recent posts.
I’m concerned about our very-rapidly mounting national debt and the possible subsequent collapse of the dollar. To the economists who read this blog, aren’t you worried about this too? If not, why not?
Hi Robin. After our quick discussion on futarchy, I kept rolling it around in my head. I’ve come up with a few points I’d like to think about further, and like I mentioned, these are in the same vein as the paper. That is, I’ve been giving some thought to useful applications. Here’s what I think so far:
1) There will be some critical organization size for which futarchy will not be feasable. As an extreme example, it would probably be impractical (and undesirable) for a family to make decisions based on bookies’ odds.
2) It strikes me that since your scheme is meant to amplify the voices of rational actors in the decision-making process (forgive me if this is a misinterpretation), its best implementation is in those organizations that suffer most from irrationality, i.e. non-profits, bureaucracies, government-sponsored monopolies, and the like.
3) Combined, my rough guess is that some non-profit with an org size on an order of magnitude of two would be the best first place to try out betting markets as policy arbiters for a trial run.
4) Competition is good for the consumer, but lousy for the supplier. In this case, the supplier of policy tends to be those with some degree (in the case of a non-profit org, this is often relatively small) of authoritarian control. Convincing rationally (worse, irrationally) self-interested people to abandon their lien on authority sounds daunting. How about some sort of co-op system where there is no central decision-making authority? There has been some mumbling about medical co-ops. Would I be willing to let the betting markets make medical decisions for me?
Wow, that last there is a hell of a question. What do you think, Robin? Would you go for it? If not, how about banking with a credit union that uses betting markets to authorize loans?
I can pretty easily answer the latter question for myself. I would camp out in front of any bank that would use betting markets to make lending decisions well before I would camp out for another of George Lucas’s cinematic offerings. The former question on health care, I’m going to waffle and say that I’d like to see a track record of improved health outcomes first. It seems to me as if that sort of market would require no small amount of sopistication, and initial designs would be fraught with error.
Anyway, if nothing else, our chat really cleared up a lot of my confusion, and helped clarify my understanding. Thanks for taking the time.
The critical parameter is more precisely common decision info value; if one doesn’t have enough valuable decisions don’t bother to pay a large fixed cost to gain better decision info. Yes, the worse one expects status quo decisions, the more attractive an improvement is. Even co-ops usually have central decision makers. The problem with a medical co-ope prediction market is that the customers don’t really want more accurate medical decisions, if that comes at a substantial expense of the other signaling benefits they get from medicine.
I’d love to purchase medical care guided or driven by prediction markets. Sadly, I don’t think I will ever be permitted to do so.
I’ve heard behavioral economics mentioned more often lately. Is the field mature enough to analyze the effectiveness of its predictions? Can results be used to gain information traditional theory can not? Any interesting research in the news? Or is it mostly hype?
I’ve wondered a lot about the possibility of advanced nanotechnology as existential risk. Nanotechnology seems to be almost as grave a threat as Artificial Intelligence, but it is discussed much less here.
Anyway, I was wondering what Robin’s (or any commenter who has an opinion) view was about the danger of nanotechnology. Do you think nanotechnology is likely to be developed before emulations/AI? Is the time frame more likely to be decades or centuries?
I think the danger is overblown much like that of AI (or climate change). Nanotechnology with the capabilities described in the early hypotheticals certainly doesn’t seem imminent. But the future is always weirder than anyone imagines (even if sometimes someone nails an important detail). I think both are still opening new vistas that we will be exploring extensively for some time to come. Self-replicating nanobots and self-improving (foom!) super-human AIs are both 50+ years off.
I’ll keep mine short. What will the ecconomies of tomorrow look like? 10 years from now? 50? 100? Obviously, no one knows, but I’d like to here Robin’s opinion and the opinions the readers, especially researched opinions.
1. How would you change the field of medicine, if you could?
2. Since every good has a diminishing marginal utility, is there a diminishing marginal utility for money itself? If no, why not?
Comment on Fogel:
One thing that I would like to see discussed is the definition of a right. People keep arguing whether or not health care is a “right.” The people I tend to agree with say it is not a right but the people I oppose say it is a right. To me, when you say people have a right to health care, I think of it as the government can’t pass a law keeping you from getting surgery or interfere with your ability to get drugs. I do not think it means government must pay for it.
But I seem to be on an island.
I’m on your island too… and so are America’s founding fathers.
It’s not quite the Rand Insurance Experiment Part 2, but it’s close. Patients who have just become eligible for Medicare die less often than patients who are slightly too young to qualify.
The health insurance characteristics of the population changes sharply at age 65 as most people become eligible for Medicare. But do these changes matter for health? We address this question using data on over 400,000 hospital admissions for people who are admitted through the emergency department for “non-deferrable” conditions—diagnoses with the same daily admission rates on weekends and weekdays. Among this subset of patients there is no discernible rise in the number of admissions at age 65, suggesting that the severity of illness is similar for patients on either side of the Medicare threshold. The insurance characteristics of the two groups are very different, however, with a large jump at 65 in the fraction who have Medicare as their primary insurer, and a reduction in the fraction with no coverage. These changes are associated with small but statistically significant increases in hospital list charges and in the number of procedures performed in hospital. We estimate a nearly 1 percentage point drop in 7-day mortality for patients at age 65, implying that Medicare eligibility reduces the death rate of this severely ill patient group by 20 percent. The mortality gap persists for at least nine months following the initial hospital admission.
Oh, and by the way, the authors of the paper are economists.
A lot changes in people’s lives upon retirement; getting Medicare is only one of them. Deaths fall during recessions because fewer people are working too hard at their jobs; might not retiring similarly improve health?
What is the evidence that people die from working too hard at their jobs?
“Turning 65 (and becoming eligible for Medicare)” =! “retirement”.
Do flu shots work? Is there any data on this question?
An evo-psych question: why/how did suicide evolve? I searched a bunch but didn’t find much.
EconLog had a post on this a while back, covering Edward Hagen’s view of depression serving the function of a labor strike. (But you can’t believe everything you read.)
That’s quite interesting. However, I’m disappointed by its weakness in addressing chronic depression or bipolar depression (which is usually chronic).
You may be interested in this article comparing, with methodological notes, home birth to hospital birth, though this may not be the appropriate place to let you know about it.
I just read your paper, http://hanson.gmu.edu/econofsf.html , in which you asked “Any publishers out there interested?” Have you considered self-publishing; you could fit your webbed papers onto one CD-R, and I would definitely be interested.
I was going to mention and forgot, that I have just read it because it’s been linked on Hacker News.
… be a charity angel.