It’s unclear what people mean when saying they’re reporting a probability according to their inside view model(s). We’ll look through what this could mean and why most interpretations are problematic. Note that we’re not making claims about which communication norms are socially conducive to nice dialogue. We’re hoping to clarify some object-level claims about what kinds of probability assignments make sense, conceptually. These things might overlap.
Consider the following hypothetical exchange:
Person 1: “I assign 90% probability to X”
Person 2: “That’s such a confident view considering you might be wrong”
Person 1: “I’m reporting my inside view credence according to my model(s)”
This response looks coherent at first glance. But it’s unclear what Person 1 is actually saying.... (read 804 more words →)
Nice! The standard method would be the BDM mechanism, and what’s neat is that it works even if people aren't risk-neutral in money. Here’s the idea.
Have people report their disvalue Y. Independently draw a number z at random, e.g. from an exponential distribution with expectation 1/λ=X. Then offer to pay them z iff z≥Y.
Now it’s a dominant strategy to report your disvalue truthfully: reporting above your disvalue can never raise what you’re offered but it can risk eliminating a profitable trade, while reporting below it either makes no difference or gives you an offer you wouldn’t want to take.
This is the exact same logic behind the second-price auction.