A simple way to apply futarchy to for-profit firms is profit-futarchy: make markets that estimate total firm market value given key firm choices, like who is CEO, what are key acquisitions, or what are key firm policies.
It seems like it would be helpful for those conducting a hostile takeover or activist investor campaign, to have a (liquid) prediction market showing that the stock price would be higher if they were successful. When will someone first try that? I guess we could use a prediction market to predict that.
Thanks for your essay. I agree the key question is when are leaders willing to commit to an info institution. Btw, I don't think manipulation is a problem when enough traders can trade enough.
Maybe it would be easier to set a metric for a simpler goal. Like rather than an individual's success, you could have some synthetic financial instrument, like a fund that could be directed to various places, with some choices that could be made, and a goal was set to optimize the value of that. That seems like a much cleaner metric.
Maybe a really simple one, like a fund that either put its value into Bitcoin or Ethereum or some mix of the two.
It seems like it would be helpful for those conducting a hostile takeover or activist investor campaign, to have a (liquid) prediction market showing that the stock price would be higher if they were successful. When will someone first try that? I guess we could use a prediction market to predict that.
That might help investors, but would it help managers? That is the question of this post.
Regarding the first paragraph, isn't this how CEOs operate already?
"Investors would hate that acquisition. Investors want the next CTO to have more experience in AI" etc etc.
And of course more informally, taking guesses at what markets incentivize, based on peer firms (and their investor behavior), etc?
I wrote an article on how futarchy can be used as advisory or check and balance mechanism to better provide epistemic humility for those in power:
https://writeergosum.substack.com/p/the-market-as-magistrate-futarchy
Thanks for your essay. I agree the key question is when are leaders willing to commit to an info institution. Btw, I don't think manipulation is a problem when enough traders can trade enough.
Maybe it would be easier to set a metric for a simpler goal. Like rather than an individual's success, you could have some synthetic financial instrument, like a fund that could be directed to various places, with some choices that could be made, and a goal was set to optimize the value of that. That seems like a much cleaner metric.
Maybe a really simple one, like a fund that either put its value into Bitcoin or Ethereum or some mix of the two.