There is very little careful thinking about the far future. Yes, many people talk about the far future as if they cared, but typical interest rates suggest few care much, and most far future discussion seems to be symbolic talk about current issues. Furthermore, when people do actually directly discuss the far future, they
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.
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?
"However, I am willing to make at least one more bet of the type shown above - $1000 inflation-adjusted payout if someone builds a superintelligence (which must at least be strictly transhuman in the sense of dominating a human on any test of intelligence) without worrying at all about Friendliness, and the Earth is still there afterward."
I think you can delete the ambiguous clause "and the Earth is still there afterward." The continued existence of Eliezer, the other bettor, and currency, should suffice.
Peter M., the subsidy level I set is my offer price for info. If no one accepts my offer, I lose nothing, and if someone does accept it, I've gained info at the price I set. Of course there are also fixed costs associated with setting up such a system, so I'd want to set my price high enough to produce enough volume to cover those fixed costs as well.
Robin: yes, I was imprecise. By "informative prices" I meant prices that provide information that could plausibly be considered more valuable than the subsidy used to generate them.What you get from observing zero trades is nearly worthless without a fair amount of information about the traders who thought about trading. If the initial price is set to a price that reflects the readily available information, I expect you'll often get zero trades. If you set the initial price somewhere else, the first few trades will give you information that is readily available.
Alas, I cannot do so; I hope you understand! However, I am trying to get my hair to the prediction market conference in SF this coming Jan. There I will be able to talk about our market, our vendor - with whom I'm quite proud to be associated - and my experiences running the market.
If I can manage to get there, I will be happy to talk to everyone who needs help. I have also tried to hold meet-ups here in NYC but no one seems much interested recently due to the financial crisis. Hopefully that will soon change.
Finally, my 2007 speech is available, altho' some corporate details are a little different due to positive restructuring - still, the main story is still valid and I hope inspiring. The speech at least I can freely share altho' it is a little large at 26mg of QT.
I'll take Eliezeer's bet. I'll start at $0.01 (since there is no higher bidder atm). Eliezeer, please advise me when the bidding is over, so I can paypal the money. Also, please prepare a digitally signed note stating your (or your "successor(s)") undertaking to pay - should be a fun excercise in itself.
I will consider what is a fair value for such a bet from my perspective (to sum up, I think the possibility of AI which would dominate any ONE human in any GENERAL test of intelligence, but cannot exponentially self-improve is pretty high) and - time permitting - will post my reasoning in due course.
Would you be willing to post your one-page memo and business case somewhere for people interested? Or perhaps put together a 5-page briefing memo with links? You've done the work to read for 3 months, can you make that work put in work for others by cutting down their need to research/read to 1 month?
Peter, I'm not following you. If you start a subsidized market maker at price X and then someone changes the price to Y, you've gained the info that someone thinks Y is a better estimate than X. More trades give more info, but even one trade gives some info. And zero trades tell you that no one who looked thought they knew of a better estimate. Of course you might have hoped for even more trades, and then blame too low a subsidy or too little publicity.
Robin, the artificially provided liquidity you have in mind doesn't imply enough trading volume from profit-oriented traders to provide informative prices, which is one of the things people have in mind when they worry about liquidity. It's implausible that info scarcity is a complete explanation for why some markets fail to attract enough trading, but my intuition tells me it's not completely wrong. Do you think you have a plausible model of what causes trading levels to be adequate that doesn't involve what information is available?
Eliezer, I'd be tempted to accept your bet, but I'm reluctant to analyze how Eliezer[2008]'s intent to interpret charitably will constrain Eliezer[2030]'s decisions. I'd want wording that I'd expect a neutral third party could interpret in a fairly predictable way, and I don't think I can produce such wording.
"<em">math/comp sci graduate working in finance."Useful but not mandatory. I have a degree in Ancient Greek and attended the Jack Kerouac School of Disembodied Poetics.
"implementing prediction markets in the real world"Of course.
"any advice on doing so professionally" AWherever you are working now, look at the low-hanging fruit, probably software projects or sales revenue forecasts. The business case is easy to make, even I could do it. But you have to put in the work first.
"open source prediction markets that are having any success"I second Chris Hibbert's Zocalo.
"Do I need a PhD to be taken seriously"Academically, yes. Practically, no. Do you want to write papers about markets or run them in a corporation? I don't have a Phd, I don't think Bo Cowgill has one, I don't think Jeff Severts' has one, etc. Some people who run them do. But if you don't have one, I recommend that you find a friendly economics or business professor ASAP if only to comfort senior management.
"informal education is necessary to contribute meaningfully:Start reading. Read all of Robin's papers; all of Tetlock's papers; all of Wolfers & Zitewitz read Bo's paper; read Jed's stuff; read Berg's papers at Iowa; subscribe to the Journal if you can. I first decided we needed a market here after a meeting in July 2006 - I presented the idea to an executive, then the head of development and he said, yes it might interest him - so I started reading and read from mid-July to mid-October.
The executive then looked at my 1-page summary and asked for the formal business case, which I started writing in Nov. 2006 with the aid of Dave Pennock and Chris Hibbert. I was fortunate at that time because the Yahoo confab on markets was in NYC. The executive liked the business case, which I then shopped around for support & comment.
After incorporating all that feedback, I presented the business case with value-of-information trees and ROI to the Board in mid-Jan. 2007. I also had already contacted 3 vendors and demo'd each solution briefy to the Board.
Approval was instantaneous, and I launched the market in Mar. 2007. If I can do it, everyone can do it. Gentlemen, start your markets now!
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.
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?
Robin: yes, if you ignore questions of whether the information is affordable, then there isn't any problem.
"However, I am willing to make at least one more bet of the type shown above - $1000 inflation-adjusted payout if someone builds a superintelligence (which must at least be strictly transhuman in the sense of dominating a human on any test of intelligence) without worrying at all about Friendliness, and the Earth is still there afterward."
I think you can delete the ambiguous clause "and the Earth is still there afterward." The continued existence of Eliezer, the other bettor, and currency, should suffice.
de Blanc, you surprise me. Why, or are you just making markets?
Peter M., the subsidy level I set is my offer price for info. If no one accepts my offer, I lose nothing, and if someone does accept it, I've gained info at the price I set. Of course there are also fixed costs associated with setting up such a system, so I'd want to set my price high enough to produce enough volume to cover those fixed costs as well.
I'll raise the bid to $20.
Robin: yes, I was imprecise. By "informative prices" I meant prices that provide information that could plausibly be considered more valuable than the subsidy used to generate them.What you get from observing zero trades is nearly worthless without a fair amount of information about the traders who thought about trading. If the initial price is set to a price that reflects the readily available information, I expect you'll often get zero trades. If you set the initial price somewhere else, the first few trades will give you information that is readily available.
@Jeff
Alas, I cannot do so; I hope you understand! However, I am trying to get my hair to the prediction market conference in SF this coming Jan. There I will be able to talk about our market, our vendor - with whom I'm quite proud to be associated - and my experiences running the market.
If I can manage to get there, I will be happy to talk to everyone who needs help. I have also tried to hold meet-ups here in NYC but no one seems much interested recently due to the financial crisis. Hopefully that will soon change.
Finally, my 2007 speech is available, altho' some corporate details are a little different due to positive restructuring - still, the main story is still valid and I hope inspiring. The speech at least I can freely share altho' it is a little large at 26mg of QT.
I'll take Eliezeer's bet. I'll start at $0.01 (since there is no higher bidder atm). Eliezeer, please advise me when the bidding is over, so I can paypal the money. Also, please prepare a digitally signed note stating your (or your "successor(s)") undertaking to pay - should be a fun excercise in itself.
I will consider what is a fair value for such a bet from my perspective (to sum up, I think the possibility of AI which would dominate any ONE human in any GENERAL test of intelligence, but cannot exponentially self-improve is pretty high) and - time permitting - will post my reasoning in due course.
D. Alex
frelkins,
Would you be willing to post your one-page memo and business case somewhere for people interested? Or perhaps put together a 5-page briefing memo with links? You've done the work to read for 3 months, can you make that work put in work for others by cutting down their need to research/read to 1 month?
Peter, I'm not following you. If you start a subsidized market maker at price X and then someone changes the price to Y, you've gained the info that someone thinks Y is a better estimate than X. More trades give more info, but even one trade gives some info. And zero trades tell you that no one who looked thought they knew of a better estimate. Of course you might have hoped for even more trades, and then blame too low a subsidy or too little publicity.
Robin, the artificially provided liquidity you have in mind doesn't imply enough trading volume from profit-oriented traders to provide informative prices, which is one of the things people have in mind when they worry about liquidity. It's implausible that info scarcity is a complete explanation for why some markets fail to attract enough trading, but my intuition tells me it's not completely wrong. Do you think you have a plausible model of what causes trading levels to be adequate that doesn't involve what information is available?
Eliezer, I'd be tempted to accept your bet, but I'm reluctant to analyze how Eliezer[2008]'s intent to interpret charitably will constrain Eliezer[2030]'s decisions. I'd want wording that I'd expect a neutral third party could interpret in a fairly predictable way, and I don't think I can produce such wording.
@John P.
"<em">math/comp sci graduate working in finance."Useful but not mandatory. I have a degree in Ancient Greek and attended the Jack Kerouac School of Disembodied Poetics.
"implementing prediction markets in the real world"Of course.
"any advice on doing so professionally" AWherever you are working now, look at the low-hanging fruit, probably software projects or sales revenue forecasts. The business case is easy to make, even I could do it. But you have to put in the work first.
"open source prediction markets that are having any success"I second Chris Hibbert's Zocalo.
"Do I need a PhD to be taken seriously"Academically, yes. Practically, no. Do you want to write papers about markets or run them in a corporation? I don't have a Phd, I don't think Bo Cowgill has one, I don't think Jeff Severts' has one, etc. Some people who run them do. But if you don't have one, I recommend that you find a friendly economics or business professor ASAP if only to comfort senior management.
"informal education is necessary to contribute meaningfully:Start reading. Read all of Robin's papers; all of Tetlock's papers; all of Wolfers & Zitewitz read Bo's paper; read Jed's stuff; read Berg's papers at Iowa; subscribe to the Journal if you can. I first decided we needed a market here after a meeting in July 2006 - I presented the idea to an executive, then the head of development and he said, yes it might interest him - so I started reading and read from mid-July to mid-October.
The executive then looked at my 1-page summary and asked for the formal business case, which I started writing in Nov. 2006 with the aid of Dave Pennock and Chris Hibbert. I was fortunate at that time because the Yahoo confab on markets was in NYC. The executive liked the business case, which I then shopped around for support & comment.
After incorporating all that feedback, I presented the business case with value-of-information trees and ROI to the Board in mid-Jan. 2007. I also had already contacted 3 vendors and demo'd each solution briefy to the Board.
Approval was instantaneous, and I launched the market in Mar. 2007. If I can do it, everyone can do it. Gentlemen, start your markets now!
John P. -
If you want to help build prediction markets you should go here:
http://zocalo.sourceforge.net/
thank you very much, ShardPhoenix!