Let's apply this to engineering for example. I need an electronic circuit for a task. You draw something and bet me it works, someone else draws something and writes competent looking circuit analysis (which you did not provide, which is indicative of you not actually having any reason to think that the circuit even works).

The bet can be seen as buying persuasiveness with money, and as such provides no guarantee that you even hold the belief.

And even if you could demonstrate that you actually hold the belief (e.g. one could infer that by observation), that is far less indicative of the belief being true, than you think it is.

Back to the circuit example, if you were a well known circuit designer renowned for rarely making mistakes, then your beliefs would have been informative, but then you wouldn't need to be making a bet to persuade. Conversely, if you aren't known for rarely making mistakes, then betting or no betting, your beliefs are not informative, and just muddle the waters (now I am not sure if you're betting because you can't analyse the circuit, or you know something I don't and you're trying to make some money from the bet).

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I question the assumption that arguments are made to persuade others. Most people never convince anyone to change their beliefs and attitudes via an argument, and yet everyone keeps making them. Why?

Here's a relevant quote from Georg Christoph Lichtenberg: "I ceased in the year 1764 to believe that one can convince one's opponents with arguments printed in books. It is not to do that, therefore, that I have taken up my pen, but merely so as to annoy them, and to bestow strength and courage on those on our own side, and to make it known to the others that they have not convinced us"

Another reason is that everyone is taught to argue in school and many people express themselves via argument out of habit. "I like trees" is an idiotic thing to say, but "We need to act now to reduce CO2 emissions because CO2 causes global warming!" indicates you've read a book or two and believe in Science. Structuring your expressions of attitude and feeling as arguments is a cheap and easy way to signal that you're educated and thoughtful, and a certain type of person can't help themselves.

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It is that bets show our belief, and *that* is a reasonable way to persuade.

That's exactly what's at issue: is it a reasonable way to persuade. Strong belief about controversial matters (Daniel Carrier, for example -- http://www.overcomingbias.c... -- neglects to conditionalize) is weak (not "powerful") evidence.

The mere fact that it may be rational to change my belief based on someone else's willingness to pay doesn't imply that people trying to convince each other based on proving the strength of their beliefs leads to reasoned discussion or reasonable outcomes. (I'm sorry for exceeding the posting limit, but I just couldn't rest until I discovered your basis for what I consider a silly error that is widely embraced, apparently, among libertarians. Here, I think I have it: the fallacy of composition.)

You must confront the whole question of what leads to reasonable societal discussions, not just what makes it rational for an individual to change his belief. What could show stronger belief than a suicide bomber, who forfeits his life in a bet on Islamic immortality? There is (a modicum of) "rationality" in someone observing this behavior and converting, which is the idea. But this isn't a reasonable way to have a discourse. Appeals to individual rationality do not necessarily lead to reasonable discourse; often they don't, this being generally true when the evidence is evidence because it proves strong (or weak) belief.

Another example. Why do norms of debate tend to proscribe ad hominem arguments, for instance the argument that the proponent is a proven hypocrite. Ad hominem arguments have their place, but in the highest and most scholarly forms of discussion, they're banned, treated as "fallacies." Why? If proving belief can persuade "reasonably," then proving that the proponent is (generally) a hypocrite should dissuade, and it can in fact be rational to change one's belief on learning the proponent is a general hypocrite.

Simply finding efficacious ways to persuade isn't all you've cracked it up to be, and the norms regarding discourse don't serve hypocrisy exclusively. They also serve to protect a far-mode disinterestedness from the intrusion of near-mode status-seeking, which lowers the intellectual level of discussion.

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I've maintained throughout this discussion that intellectuals betting on their ideas is an undesirable practice, but now let me add that it is less bad to bet on a prediction market than to "just bet" (at 50-50 odds). Since I've seen no reason to think anyone will be willing to subsidize general prediction markets enough to make them sufficiently rewarding to work, it's important to distinguish the effects of betting on prediction markets from "ordinary" bets (such as was offered Krugman, for example) in order to see just how bad betting would really be for intellectual life.

The difference is that the prediction market would reward the person betting on their idea approximately according to the marginal utility of the idea. Put simply, an idea that everyone else thinks is wrong is (usually) more valuable than an idea most everyone else thinks is right, and the prediction market takes this into account. [Edit.] You could negotiate odds, but the low chances of agreeing on what odds would do the idea justice is a big obstacle, and even odds are the personal-betting default.

Conclusion: Pressure to accept bets, like Hanson puts on Cowan, would produce even more conformism ( see "Pathologies of belief-opinion confusion" [ http://tinyurl.com/6znzxoj ] than would prediction markets. People should be encouraged—not discouraged by obligations to bet—to develop "improbable" ideas.

Bryan Caplan notes in a tweet I came across that "getting wrong people to bet is like pulling teeth." To translate (Robin style), people who are probably wrong but whose ideas would be very valuable if correct aren't dumb enough to accept 50-50 odds.

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Consider $FAMOUS_INVESTOR, known for making a fortune in the stock markets by repeatedly making good picks. You've just come across reliable, non-public, randomly-sampled information that $FAMOUS_INVESTOR has invested in $COMPANY. You didn't get his/her reasons. Does this increase the probability that you will invest in $COMPANY?

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The fact that your wanting to persuade influences your bets does not change the fact that all else equal the stronger your belief the more betting you are willing to do.

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But once everyone realizes that the bets don't make sense financially, why would they be persuasive? If we all KNOW that people are making them as "arguments", then they have no force as arguments, since people would be making these "bets as arguments" regardless of the strength of their beliefs if they want to influence people.

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I agree systemization can represent real improvement, such as stock analysts track records, but bets are only more memorable to the parties. The winner may remind others later of his opponents failures, but otherwise few will remember. But how many can forget a book predicting Dow 36,000, even without a bet?

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Arguing doesn't make sense either from a direct personal benefit sense; it won't change our own beliefs enough to buy better decisions. When we argue we pay a personal cost in time and effort in order to persuade others. I'm suggesting we bet for the same reason, to persuade others. Bets should be persuasive because all else equal believing more makes you willing to bet more.

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It isn't that we argue to show our belief. We argue more to persuade. It is that bets show our belief, and *that* is a reasonable way to persuade. It is reasonable to change your belief on a topic on the basis of someone else's willingness to pay costs to show their beliefs on the topic.

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But given that the bets don't really make sense from a financial standpoint, why would making them be persuasive to an observer? In particular, why would they be more persuasive than the arguments you could express with a similar amount of effort?

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Put your money where your mouth is might be good advice when you're dealing in near-mode prospects, but it isn't even clear what it means when the issues are far-mode abstractions. Consider a question that's related to the injunction: If you're so smart, why aren't you rich?--particularly germane in economics. Part of the fallacy involved is that it takes different (not necessarily incompatible) qualities of mind to extract the essential principles versus to combine that knowledge with background knowledge to apply the principles to particular cases in a chaotic world.

Expertise in the sciences is properly evaluated by professional peers, not market success, which bears little relationship to scientific prowess.

I have trouble concluding anything but that you conservatives and libertarians are looking to crown authority figures on which you can rely rather than to further scientific debate.

[Added.]Robin lives in a simple moral world in which there are hypocrites and truth tellers. The only complexity he allows is that all of us are both.

He doesn't allow that there's more than one truth to tell. I contend there are at least two truths: opinion and belief, and belief doesn't belong in scientific discourse. Again, Robin appears to be extremely radical when it suits him, as he is uprooting intellectual disinterestedness. My most basic explanation of the distinction between opinion and belief is "Two kinds of belief" -- http://tinyurl.com/3lxp2eh

[Added. 6 pm] One exercise I think is valuable that one might try if bored on this 4th of July is to locate a clear example of your opinion differing from your belief on something important and abstract. (I'm rather curious about how easy or hard others find this--feel free to comment on my blog.) Grasping and applying the distinction is absolutely fundamental for political and intellectual rationality, but (in my experience) it requires tolerating fairly severe cognitive dissonance. ( http://tinyurl.com/8m65wry ) I must remind myself that I don't really believe all my extreme opinions (I'm persuaded as well as convinced by qualia nihilism, for example, but I think I'm probably wrong about infinity and I can't imagine how I could possibly be right about cosmology ( http://tinyurl.com/aqcy99w , 4th section)--yet I can catch myself thinking I must be right, the arguments seem so elegant; admitting this is painful.

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>Your analogy was that if we want people to argue their beliefs we should also want them to bet on their beliefs, and when the father of futarchy talks about betting he is of course advocating for prediction markets.

I don't think Robin's argument is *essentially* about prediction markets. At least that's not what I react to most strongly in what he writes here.

Robin makes it increasingly clear that this is about making ad hominem arguments intellectually respectable. If Hanson can prove he's confident in what he says, he (according to Hanson) has stated an argument! And it's fine for Hanson to counter an opponent's arguments by pointing out that the opponent has failed to demonstrate self-confidence!

Perhaps Hanson thinks intellectual discourse hasn't progressed beyond the status contests of primeval times. I don't really know what he thinks about this; the equation of bets and arguments is just plain weird, yet Robin's obviously quite committed to it and thinks he's explained it adequately.

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"If it turns out my model does “beat the market”, I’ll earn a healthy sum until other models and the market-pick tweak it into the average (weak EMH-ish). Suddenly, model designers across the world are incentivized not just to create DSGEs that will most beautifully grace the letters of AER or impress friends, but those that will best predict out-of-sample trends.

But since we respect bets from models and not random luck, the few gems would eventually prove really successful even without betting and receive the attention they deserve."

I'm very skeptical about such predictions. After all the years the stock market has existed and traders have specialized in modeling it, a gorilla choosing random stock can still keep up with the market for years at the time. Multiple studies have shown that executive, investors, stock trader and even (pop-)cultural performance are largely based on coincidence. In complex sectors there aren't really any true champions, our ape brains just like the idea of idolizing champions so much that we imbue those who are slightly above the average and get a lucky streak with notions of "excellency".

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"If gambling makes you queasy, you can avoid the gambling aspect just by each side putting up a bond on their own word. It's to force the opponent to be specific and pinned down on exactly what his claim is, so it can be evaluated."

Yes, but this is very different from a prediction market where people can bet anonymously and some will attempt manipulation.

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"The entire point of the post is about an analogy between arguments and bets. Yet 30 comments in and no one speaks to that analogy. It is just as if they were responding to the keyword topics, and ignoring the content of the post. This is pretty much what I'd expect if I said the word "abortion" in the post title."

Your analogy was that if we want people to argue their beliefs we should also want them to bet on their beliefs, and when the father of futarchy talks about betting he is of course advocating for prediction markets.

Several people here adressed reasons why it's just not the same thing, in theory, in practice (result), or both. They may not have stated explicitly that they were juxtaposing argueing against prediction markets, but you didn't make your analogy explicit either, someone who can read between the lines has no problem discerning both your analogy and the implict juxtapositions in the comments.

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