#1. Decision-Making Tool – Decision markets are conditional prediction markets intended (by some idealists) to be used as a decision-making tool replacing human decision makers.
#2. Decision-Aid Tool – Decision markets are conditional prediction markets intended to be used as a decision-aid tool advising human decision makers.
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Am I nailing well the Robin Hanson ambiguity here?? It seems to me that in his papers (Decision Markets – Futurarchy), he is in case #1. At other times, I spotted him in case #2. (((I need to take another look at his slides and talks to be sure he was in case #1, as I thought at the time.)))
My Take: Case #1 will never happen. Complete B.S. from libertarians intoxicated by science-fiction. For a good reason: human decision makers take pleasure in making decisions —they will never outsource decisions to a market mechanism. Give me a break. Waste of time to listen to that stuff. Case #2 is interesting—although it requires faith in markets. I wonder how many decades or centuries will pass before we see a bunch of bold CEOs testing conditional prediction markets as a decision-aid tool. You’ll notice with me that they aren’t many conditional prediction markets, out there, these days, on the public prediction exchanges (betting exchanges). Is it because the traders are not interested (as I was told) or because the public exchange managers lack interest in research (as one might suspect)?
My use of the phrase “decision markets” includes both of these. Care to offer a bet on your claim that no one will *ever* delegate any decision making power to a conditional market?
“My use of the phrase “decision markets” includes both of these.”
Then, maybe it would be great to have a vocabulary that distinguishes between decision markets (strong form — decision-making tool) and decision markets (weak form — decision-aid tool).
“Care to offer a bet on your claim that no one will *ever* delegate any decision making power to a conditional market?”
No. You are not faithful to the spirit of your claim and mine. Your claim is that decision markets (in their capacity of decision making) can be used in all kind of business applications. In each of your talks, you cite half a dozen instances —at Confab, one instance was a decision market making the choice of which marketing agency to select. My claim is that business executives will never consider decision markets (strong form) as a replacement for human business decisions. It will never be taught at business schools.
My argument is based on the fact that you forget one factor: the self-satisfaction derived from making decisions and applying them throughout an organization. There’s great satisfaction in acting like a little dictator (whether you run a group blog, a corporation, or a government). No way a person in power will delegate decisions to a machine or a mechanism. (Note that I thought of an exception, in a previous blog post: when technical decisions are not made by executives, but by lower level employees.)
You would win the bet if you were able to provide just *ONE* instance. I agree that you stick with my verbalization in the blog post above, but that’s not the spirit of my claim. One can always cite one exception for anything. I can dig the aviation archives and find one instance of a pilot high on LSD who made a successful landing. I was thinking of the decision markets (in their strong form) being commonly accepted as a business decision tool by the management science experts and the business community.
Any play-money prediction market along this line would be interesting. And I have no problem publishing on the frontpage that I was damn wrong, if it were the case one day.