At 04:32 PM 10/3/2007, you wrote:
> At 02:47 PM
10/3/2007, you wrote:
> I made a specific argument, to which the counterargument
raised by
> both papers does not seem to apply. The situation is not
simply the
> presence of manipulators. It includes a proposer who
colludes with
> the manipulators.
>
> Perhaps it will be clearer if I explain it in your own
terms. ...
> No, it would be clearer if you were just direct: what is the
scenario you
> worry about?
The scenario I worry about is that, under the futarchy mechanism,
someone (call her Alice) makes a deliberately obscure self-serving
proposal. Since other traders can't easily figure out what
they're
trading, they are scared off, turning the market into a non-market.
Since no-one else is trading, Alice's bid or her trade with a
confederate effectively dictates the price. She sets a price
sufficiently high to enact her self-serving proposal.
The markets estimate NW (national welfare) conditional on policy
choice.
It is presumably hard to increase NW. In equilibrium she
submits some
set of proposals which have some average NW and which you claim
are otherwise indistinguishable, and which makes the same public
acts
regarding. In that case, the market price would be that average NW
for
all of them. If this average is below the status quo NW none of
them
will be adopted. If it were higher it must be because she has
access to
some unusual pool of good ideas. In this case she might
be able to
extract some price for her good ideas, by bundling them with help to
her.
So what is the problem exactly?
Robin Hanson rhanson@gmu.edu
http://hanson.gmu.edu
Research Associate, Future of Humanity Institute at Oxford
University
Associate Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323