Discussion about this post

User's avatar
Overcoming Bias Commenter's avatar

look at the low-hanging fruit, probably software projects

If the source code for the software project is freely available, then the futures contract can be specified in a formal language, that is, it can consist of a computer program that accepts the source code as input and outputs text explaining who owes who what amount of money. The advantage of using a formal language for a contract is that the the cost of adjudicating the contract does not rise much as the complexity of the contract grows because (briefly) the chances that a judge or jury or even a lawyer is needed is much lower than when the contract is written in a natural or informal language like most legal contracts are. There have been at least a half dozen papers (written by programming-language researchers and a legal scholar) on formal languages in which to write contracts, and I can provide references to anyone who contacts me back channel. I can also provide detailed examples of very complex formal futures contracts about source code that will tend to be economically valuable.

I think it would prove economically very valuable to make it possible for professional computer programmers to make money like derivatives traders do; it would provide a middle way between the programmer's being a contractor (or employee) and the programmer's being a stockholder in a "startup" (a young corporation). It is also an answer to the question of how society can drastically increase the number of programmers making a good living working on open-source software: make a market where people can trade bets on the future availability of specific economically-valuable modifications of the software: the programmer makes a large bet that such and such modification of such and such software will become available by such and such date, then personally uses his/her programming skills to make the modification available. There is a "free rider" problem in that if two programmers have bets on the availabilility of the same modification, then it is in the interests of each to have the other one do all the work of making the modification available, and I am not enough of an economist or mechanism designer to know how pernicious or tractable that problem is.

Expand full comment
Robin Hanson's avatar

Peter, my post described all these different factions with very different perspectives. At first one could just get representatives from several groups to contribute their intuitive judgments, weighed by their willingness to bet. A coherent summary of even that would be quite valuable I think. Could even that not be induced via sufficient subsidy and publicity?

Expand full comment
30 more comments...

No posts