Re: Vote on Valuess, Bet on Beliefs

From: Robin Hanson (
Date: Tue Aug 01 2000 - 09:40:20 MDT

[This will be my last post for two weeks - I'm going on vacation now. RH]

Eliezer S. Yudkowsky wrote:
>It strikes me that the amount of money one has, and the willingness to
>bet, does not necessarily correlate with either competence or
>informational advantage. Unless idea futures are a social fixture, as
>in Stiegler's _Webmind_, one wild-eyed millionaire could blow the whole

I responded:
> I may not have done a perfect job, but I really do address such issues
> in the paper. Maybe you could give it a look before criticizing it?

Eliezer S. Yudkowsky wrote:
>Are you talking about the section "The Rich Would Have More Influence"?
>As far as I can tell, your response is that rational rich people won't
>bet badly. It's not the rational ones I'm worried about.

I had in mind primarily my long review of the vast literature on the
efficiency of markets, "Information Successes of Speculative Markets".
(But also the section you mentioned, and the section on buying policy.)
Compared to other institutions, speculative markets seem to do very well.
This empirical data should count for a lot.

The relevant question to ask of institutions are always comparative:
so how much harm could that millionaire do under other alternative
institutions? And if certain situations are more of a problem for
certain institutions, then what is the relative frequency of those
problem situations? That is, how often do rich people go nuts and try
to throw all their money away so as to destroy the world?

No one person has nearly enough wealth to dominate a speculative market;
if other speculators mostly think that one person is wrong, then that
one person just can't substantially influence a speculative estimate.

Robin Hanson
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030
703-993-2326 FAX: 703-993-2323

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