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Douglas_Reay comments on [LINK] Intrade Shuts Down - Less Wrong
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One way to deal with Validating Questions would be to automatically allow questions that match an approved list of formats. To add to or amend the list of formats you'd circulate a proposed definition and allow other proposals to be added, then let people meeting some criteria (eg users with more than X bitcoins in escrow on currently outstanding bets) to vote the different definitions up or down over a 7 day period.
So, for example, one format might be: {DOWJONES} on {FUTUREDAY} will match {PRICE_RANGE}
Where, for example, {DOWJONES} for a particular {FUTUREDAY} is defined as the closing price of the Dow Jones Industrial Average, as retrieved at noon on the day after {FUTURE_DAY} by looking at a list of 5 URLs such as:
https://www.google.com/finance/historical?cid=983582&startdate=Dec+25%2C+2012&enddate=Dec+26%2C+2012
parsing each one via a supplied perl regexp or similar to get just a single number, and then taking the median value of that number.
In effect, the bet would be actually about values on a number of different web pages, rather than about the Dow Jones index itself, and the people placing the bets would be assuming the risk that the web pages on the resolution day didn't reflect the actual stockmarket price they expected it to.
This greatly limits the kind of questions that can be asked.
Another way would be to have different 'authorities'. Each authority can pick which proposed questions are valid for that authority. If someone wishes to place a bet on a question that's been validated by at least one authority, then they get a list of authorities available for that question, and choose which one to use (which may be influenced by whether there are others betting via that authority in the other direction).
Different authorities could use different systems. So one might required the pre-agreed format style, another might use voting to resolve and allow any question, a third might use a panel of experts and allow free text questions by only in one domain (eg sports).
A reputation system could keep track of how popular different authorities are for different domains of question.
You'd have to pay a percentage of proceeds to the authorities in order to monetize staying an authority over selling your reputation for a guaranteed win in bitcoins. Especially in a single-authority system.
The basketball score is 94-72 late in the fourth quarter. "Second team wins" contracts go down to pennies on the dollar. But, the arbitrating authority has the fix in for "Second team wins", and buys out massive numbers of the same contract, then takes vast quantities of money out of the system.
For sports, however, there's an easy solution. Just have Google be your authority. So, for figuring out who won the Oregon-UCLA game last night, the system would pay out on the results of the Google search "Oregon UCLA basketball score" as of a certain time. Reading your earlier posts this seems like what you already described, though.
Depends on the authority type. The pre-agreed format type of authority shouldn't need paying; nor one that relies upon mass voting to make decisions. Because in neither case is there a small group of controllers with the power to 'fix' the result.
One that uses a panel of experts will need some way to prevent a cabal of experts colluding together, and some form of reward for their time. The reward might be the reputation they gain from being seen as an expert (like with WikiPedia). The anti-collusion measure might be by having quite a large panel and selecting 7 members from it at random for each decision (preferably, selected only after the bets have been laid). However, yes, the system ought to be set up in a sufficiently flexible manner to allow each authority to be able to set in advance a rate of 'cut' for bets using them as the decider (with competition between authorities keeping such rates low).
You need to have someone that you trust to perform that Google search and read it and then decide who won the money. Otherwise the two people who bet might disagree on what the Google search says.
A quick search shows that there are lots of websites providing a ticker of sports results in XML form. Rather than doing a google search which, as you say, would need interpretation, I think it would be more reliable to pick in advance a basket of such XML feeds, where you know in advance the precise format they'll use to announce the result.