[Ecommerce] Re: Promote Progress of Science and Useful Arts: Scientific Prediction Exchange

[Seth Johnson]

Can't say I can really assess this sort of thing, but my response
is at the level of whether this works in general:  I would
observe that when discoveries are made, it's often a reflection
of new understandings of the nature of the "stuff" that's
presupposed in previous scientific knowledge: new laws derive
from new understandings of the terms that had made up previous
laws.

So deciding who won a bet on an newly discovered fact can really
be contentious -- can certainly be made to be contentious when
the interests of betting parties come into play.  The only way to
address this that I can think of, would be to require that some
sort of experimental apparatus be specified that would decide the
outcome by reproducibility.  But that would either be
unsatisfactory for the purpose of resolving issues of whether a
fact was discovered, because the experiment proposed would
often/usually be irrelevant to the real facts and circumstances
of the discovery in the end, or it would be nearly the same as
achieving the discovery yourself.

The usual principle in science where a discovery is proven by
reproducibility, works in large part because the only issue is
the verifiability of a discovery that way, not whether somebody
gets to win a predetermined bet.  Of course, in this world, there
is the other way of "proving" a discovery -- in a very, very
different sense -- which is the "proving" of successfully
bringing a discovery to market in marketable form.


Seth

Seth Johnson wrote:
>
> > http://agoraphilia.blogspot.com/2006/08/prediction-markets-whup-on-copyrights.html
>
> Prediction Markets Whup on Copyrights and Patents
>
> posted 8:04 PM by Tom W. Bell
>
> Tuesday, August 29, 2006
>
> I've just posted to SSRN my forthcoming paper, "Prediction
> Markets for Promoting the Progress of Sciences and the Useful
> Arts." It will appear in vol. 14 of the George Mason Law Review.
> You can download a pretty-to-close-to-final draft at here. The
> abstract:
>
>     Copyrights and patents promote only superficial progress in
>     the sciences and useful arts. Copyright law primarily
>     encourages entertaining works, whereas patent law mainly
>     inspires marginal improvements in mature technologies.
>     Neither form of intellectual property does much to encourage
>     basic research and development. Essential progress suffers.
>
>     Prediction markets offer another way to promote the sciences
>     and useful arts. In general, prediction markets support
>     transactions in claims about unresolved questions of fact. A
>     prediction market specifically designed to promote progress
>     in the sciences and useful arts - call it a scientific
>     prediction exchange or SPEx - would support transactions in a
>     variety of prediction certificates, each one of which
>     promises to pay its bearer in the event that an associated
>     claim about science, technology, or public policy comes true.
>     Like other, similar markets in information, a scientific
>     prediction exchange would aggregate, measure, and share the
>     opinions of people paid to find the truth.
>
>     Because it would reward accurate answers to factual
>     questions, a SPEx would encourage essential discoveries about
>     the sciences and useful arts. Researchers and developers in
>     those fields could count on the exchange to turn their
>     insights into profit. In contrast to copyrights or patents,
>     therefore, a SPEx would target fundamental progress.
>     Furthermore, and in contrast to copyrights and patents, the
>     exchange would not impose deadweight social costs by legally
>     restricting access to public goods. To the contrary, a
>     scientific prediction exchange would generate a significant
>     positive externality: Claim prices that quantify the current
>     consensus about vital controversies.
>
>     This article measures copyright and patent law against the
>     Constitution's call for promotion of the Progress of science
>     and useful Arts, to find those traditional forms of
>     intellectual property lacking. As a cure for that policy
>     failure, it suggests scientific prediction exchanges. Given
>     that such exchanges offer the promise of large net public and
>     private benefits, why don't they already thrive in the United
>     States? Because the laws written for commodity futures,
>     securities, and gambling markets cast a pall of legal
>     uncertainty over scientific prediction exchanges. To ease
>     that unwarranted burden, the article explores a variety of
>     strategies designed to guarantee the legality of scientific
>     prediction exchanges. The article concludes with an all-too-
>     apt illustration of how legal risks can discourage prediction
>     markets from promoting the progress of science and the useful
>     arts.

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