Archive for 'Alternatives'
Pari-Mutuel Wagering
The probability estimate prediction market represents an improvement over what might have been the best earlier approach for aggregating bets on a particular outcome: pari-mutuel wagering, commonly used in horse racing. In pari-mutuel wagering, a bettor can place money on any possible outcome. For example, in a horse race, a bettor could place $1 on […]
Scoring Rules
A scoring rule is simply a mathematical function that is used to calculate a reward to be granted to a forecaster based on the accuracy of the forecast. Suppose that a video game software company is deciding whether to produce a game for a new game platform currently in development, the XCubeStation. A key variable […]
Legal Predictive Standards
The theory underlying the prediction market approach might be called “predictive decision making,”11 wherein a legal decision depends on an explicit announced prediction, rather than on a set of detailed rules or on some other normative framework for reaching results in particular cases. A prediction market is only one possible prediction mechanism that might underlie […]
Insurance
A significant virtue of prediction markets is that they give third parties financial incentives to make accurate predictions. But there are other prediction mechanisms for which this is also true and that can serve as alternatives to prediction markets. Perhaps the most familiar is insurance. By requiring insurance for certain events, a government motivates independent […]
The Common Law
Some might object that trial by market might inhibit the creation of precedent. Some cases still might be appealed, but possibly far fewer than before, and the cases selected would only by coincidence be those that raise the most interesting legal issues. The result could be increased legal uncertainty. Moreover, it might seem that trial […]
Chain Novels
The text-authoring market can produce texts of any type, for any purpose. That does not necessarily mean, however, that the market is always the best way to produce texts. Perhaps the ultimate challenge would be producing a novel. It is not inherently difficult for groups to produce novels collaboratively. A group could agree, for example, […]