Here’-s what Robin Hanson meant…- when he wrote:
[…] markets that give the consequences of electing any particular candidate.
This:
Let U = the unemployment rate, D = Democrats win, and R = Republicans win. An exchange rate between “Pays $U if D” and “Pays $1 if D” gives an estimate of E[U|D]. Similarly, an exchange rate between “Pays $U if R” and “Pays $1 if R” gives an estimate of E[U|R]. We can compare E[U|D] and E[U|R] to see which candidate is expected to have a lower unemployment rate. And we know how to pay off all of these assets, no matter what happens.
More:
Since we can pay off all the assets objectively, predictions of their relative value are also predictions about objective things, not just about opinion. Any information about what employment policies a candidate would choose, and about the consequences of those policies, could be relevant.
More in Robin Hanson’-s paper on “-decision markets”- —-PDF file.
And read Mike Giberson’-s comments on the Patri Friedman blog post. (He likes it and thinks I was too harsh on it.)
