Re:Futarchy: Robin Hanson on prediction markets
by __MatrixMan__ on Wednesday September 15, 2021 @10:50AM
(#28539850)
If you reduce transparency you also lose out on a lot of utility that centers around the wagered amount being an indicator of certainty.
Suppose you're using prediction markets to encourage thorough code reviews, specifically with an eye towards catching malicious commits. Run of the mill non-malicious PR's get lots of little yes wagers, and are merged without exceptional scrutiny from the package maintainers. Then a malicious commit comes along and a reviewer wagers $100 on "not merged". This captures the attention of the maintainers and they give the PR extra scrutiny. Turns out it has a malicious commit, so it doesn't get merged and the reviewer who found the flaw is rewarded with the money wagered by those who didn't find the flaw (plus some from the stakeholders, who seed the market with some "no" money to encourage participation in the game even in boring non-adversarial times).
If you hide the predictions and the amounts, you can't use the unsettled bets as inputs for decision making.
Suppose you're using prediction markets to encourage thorough code reviews, specifically with an eye towards catching malicious commits. Run of the mill non-malicious PR's get lots of little yes wagers, and are merged without exceptional scrutiny from the package maintainers. Then a malicious commit comes along and a reviewer wagers $100 on "not merged". This captures the attention of the maintainers and they give the PR extra scrutiny. Turns out it has a malicious commit, so it doesn't get merged and the reviewer who found the flaw is rewarded with the money wagered by those who didn't find the flaw (plus some from the stakeholders, who seed the market with some "no" money to encourage participation in the game even in boring non-adversarial times).
If you hide the predictions and the amounts, you can't use the unsettled bets as inputs for decision making.