In which I examine some of the latest development in automated fact checking, prediction markets for policies and propose we get rich voting for robot politicians.

http://pirate.london/2016/09/why-we-may-elect-our-new-ai-overlords/

**Thought experiment 1 – arbitrage opportunities in prediction market**

You’re Mitt Romney, biding your time before riding in on your white horse to win the US republican presidential preselection (bear with me, I’m Australian and don’t know US politics). Anyway, you’ve had your run and you’re not too fussed, but some of the old guard want you back in the fight.

Playing out like a XKCD comic strip ‘Okay’, you scheme. ‘Maybe I can trump Trump at his own game and make a bit of dosh on the election’.

A data-scientist you keep on retainer sometimes talks about LessWrong and other dry things. One day she mentions that decentralised prediction markets are being developed, one of which is Augur. She says one can bet on the outcome of events such as elections.

You’ve made a fair few bucks in your day. You read the odd Investopedia page and a couple of random forum blog posts. And there’s that financial institute you run. Arbitrage opportunity, you think.

You don’t fancy your chance of winning the election. 40% chance, you reckon. So, you bet against yourself. Win the election, lose the bet. Lose the bet, win the election. Losing the election doesn’t mean much to you, losing the bet doesn’t mean much to you, winning the election means a lot of to you and winning the bet doesn’t mean much to you. There ya go. Perhaps if you put

Let’s turn this into a probability weighted decision table (game theory):

Not participating in prediction market:

Cumulative probability weighted value: (0.4*2) + (0.6*-1)=+0.2 value

participating in prediction market::

Cumulative probability weighted value: (0.4*2) + (0.6*-1)=+0.2 value

They’re the same outcome!
Looks like my intuitions were wrong. Unless you value winning more than losing, then placing an additional bet, even in a different form of capital (cash v.s. political capital for instance), then taking on additional risks isn’t an arbitrage opportunity.

For the record, Mitt Romney probably wouldn’t make this mistake, but what does post suggest I know about prediction?

**Thought experiment 2 – insider trading**

Say you’re a C level executive in a publicly listed enterprise. However, for this example you don’t need to be part of a publicly listed organisatiion, but it serves to illustrate my intuitions. Say you have just been briefed by your auditors of massive fraud by a mid level manager that will devastate your company. Ordinarily, you may not know how to safely dump your stocks on the stock exchange because of several reasons, one of which is insider trading.

Now, on a prediction market, the executive could retain their stocks, thus not signalling distrust of the company themselves (which itself is information the company may be legally obliged to disclose since it materially influences share price) but make a bet on a prediction market of impending stock losses, thus hedging (not arbitraging, as demonstrated above) their bets.

**Thought experiment 3 – market efficiency**

I’d expect that prediction opportunities will be most popular where individuals weighted by their capital believe they gave private, market relevant information. For instance, if a prediction opportunity is that Canada’s prime minister says ‘I’m silly’ on his next TV appearance, many people might believe they know him personally well enough that it’s a higher probability that the otherwise absurd sounding proposition sounds. They may give it a 0.2% chance rather than 0.1% chance. However, if you are the prime minister yourself, you may decide to bet on this opportunity and make a quick, easy profit…I’m not sure where I was going with this anymore. But it was something about incentives to misrepresent how much relevant market information one has, and the amount that competitor betters have (people who bet WITH you)

Betting on the future is a good way to reveal true beliefs.

As one example of such a bet on a key debate about a post-human future, I'd like to announce here that Robin Hanson and I have made the following agreement. (See also Robin's post at Overcoming Bias):

It's a bet on the old question: ems vs. de novo AGI. Kurzweil and Kapor bet on another well-known debate: Will machines pass the Turing Test. It would be interesting to list some other key debates that we could bet on. 

But it's hard to make a bet when settling the bet may occur in extreme conditions:

• after human extinction,
• in an extreme utopia,
• in an extreme dystopia or,
• after the bettors' minds have been manipulated in ways that redefine their personhood: copied thousands of times, merged with other minds, etc.

MIRI has a "techno-volatile" world-view: We're not just optimistic or pessimistic about the impact of technology on our future. Instead, we predict that technology will have an extreme impact, good or bad, on the future of humanity. In these extreme futures, the fundamental components of a bet--the bettors and the payment currency--may be missing or altered beyond recognition.

So, how can we calibrate our probability estimates about extreme events? One way is by betting on how people will bet in the future when they are closer to the events, on the assumption that they'll know better than we do. Though this is  an indirect and imperfect method, it might be the best we have for calibrating our beliefs about extreme futures.

For example, Robin Hanson has suggested a market on tickets to a survival shelter as a way of betting on an apocalypse. However, this only relevant for futures where shelters can help; and where there is time to get to one while the ticket holder is alive, and while the social norm of honoring tickets still applies.

We could also define bets on the progress of MIRI and similar organizations. Looking back on the years since 2005, when I started tracking this, I would have liked to bet on, or at least discuss, certain milestones before they happened. They served as (albeit weak) arguments from authority or from social proof for the validity of MIRI's ideas. Some examples of milestones that have already been reached:

• SIAI's budget passing $500K per annum
• SIAI getting 4 full-time-equivalent employees
• SIAI publishing its fourth peer-reviewed paper
• The establishment of a university research center in relevant fields
• The first lecture on the core FAI thesis in an accredited university course
• The first article on the core FAI thesis in a popular science magazine
• The first mention of the core FAI thesis (or of SIAI as an organization) in various types of mainstream media, with a focus on the most prestigious (NPR for radio, New York Times for newspapers).
• The first (indirect/direct) government funding for SIAI

Looking to the future, we can bet on some other FAI milestones. For example, we could bet on these coming true by a certain year.

• FAI research in general (or: organization X) will have Y dollars in funding per annum (or: Z full-time researchers).
• Eliezer Yudkowsky will still be working on FAI.
• The intelligence explosion will be discussed on the floor of Congress (or: in some parliament; or: by a head of state somewhere in the world).
• The first academic monograph on the core FAI thesis will be published (apparently that will be Nick Bostrom's).
• The first master's thesis/PhD dissertation on the core FAI thesis will be completed.
• "Bill Gates will read at least one of 'Our Final Invention' or 'Superintelligence' in the next 2 years" (This already appears on PredictionBazaar.)

(Some of these will need more refinement before we can bet on them.)

Another approach is to bet on technology trends: brain scanning resolution; prices for computing power; etc. But these bets are about a Kurzweillian Law of Accelerating Returns, which may be quite distinct from the Intelligence Explosion and other extreme futures we are interested in.

Many bets only make sense if you believe that a soft takeoff is likely. If you believe that, you could bet on AI events while still allowing the bettors a few years to enjoy their winnings. 

You can make a bet on hard vs. soft takeoff simply by setting your discount rate. If you're 20 years old and think that the economy as we know it will end instantly in, for example, 2040, then you won't save for your retirement. (See my article at H+Magazine.) But such decisions don't pin down your beliefs very precisely: Most people who don't save for their retirement are simply being improvident. Not saving makes sense if the human race is about to go extinct, but also if we are going to enter an extreme utopia or dystopia where your savings have no meaning. Likewise, most people save for retirement simply out of old-fashioned prudence, but you might build up your wealth in order to enjoy it pre-Singularity, or in order to take it with you to a post-Singularity world in which "old money" is still valuable.

I'd like to get your opinion: What are the best bets we can use for calibrating our beliefs about the extreme events we are interested in? Can you suggest some more of these indirect markers, or a different way of betting?