Crazy, quixotic, or feasible? (Part 3 of 3)

Below is the last (for now) but most important part of my Conspiracy Theory Betting Market proposal from my forthcoming paper “Betting on Conspiracies” (footnotes below the fold):

One practical objection to my proposal is that conspiracy theories generally refer to past events, like the JFK assassination, 9/11, or the election of 2020. The objection here is that one cannot use a market to “predict” a past event. In reality, though, betting markets are versatile and can be used for a wide variety of purposes beyond forecasting. Among other things, betting markets can provide financial services such as risk-management and the funding of public goods.[1] In addition, betting markets can be used to detect lies, encourage and protect whistleblowers, and provide decision makers with honest advice.[2] In principle, then, we should be able to extend betting markets to conspiracy theories as well.

The most serious practical objection to my proposal, however, is the “Who Decides?” question. Simply put, who decides whether a particular conspiracy theory is true or whether a particular claim or allegation is “fake news”? To the point, what separates actual or true conspiracies, like the assassination of the President of Haiti on July 7, 2021,[3] from improbable or far-fetched conspiracy theories, like Gödel’s “Leibniz Conspiracy”? In short, where should we draw the line, and how should we draw it? [Note to my readers: I devote the first two parts of my paper to Kurt Gödel’s “Leibniz Conspiracy”.]

To solve this dilemma, I would consider the creation a special “conspiracy court”–perhaps consisting of retired judges as well as randomly-selected citizen-jurors–and turn to the actual law of conspiracy.[4] This court would hold hearings and allow anyone to make arguments or present evidence. The court would then have to decide, does the alleged conspiracy theory satisfy the elements of conspiracy law?, perhaps using “the preponderance of the evidence” or “more likely than not” standard used in civil cases. That is, instead of asking whether a given conspiracy theory is simple or falsifiable or questioning the mental health of conspiracy proponents, we should be asking a series of practical or legal questions: (1) Is the agreement an illicit one? (2) Which conspirator has performed an overt act in furtherance of the conspiracy? And (3) which standard of proof should apply to the previous two questions?

By way of example, the general federal conspiracy statute, which is codified at 18 U.S.C. § 371,[5] defines a conspiracy as follows:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.

In other words, the crime of conspiracy refers to an illicit agreement between two or more persons, i.e. an agreement to commit a crime or a civil offense, such as common law fraud.[6] The conspirators must intend to achieve the goal of the conspiracy, and at least one of the conspirators must commit an “overt act” in furtherance of the conspiracy.[7] As an aside, it is worth noting here that a conspiracy need not be successful in order to constitute a crime; it is the illicit agreement itself that it is illegal, regardless of whether the conspiracy is successfully carried out beyond the commission of an overt act in furtherance of the conspiracy.[8] Given this well-developed body of law, a specially-constituted “conspiracy court,” as I have outlined here, could turn out to be an ideal neutral party that could be trusted with resolving the specific claims underlying the bets in my proposed market.[9] People will participate in a betting market only to the extent they trust that the methods and processes used to resolve bets are fair, accurate, and unbiased. A special “conspiracy court,” staffed with experienced judges and randomly-selected citizen-jurors and basing its decisions on the law of conspiracy, would go a long way to building and cultivating this trust.

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[1] See generally Sztorc (2015b).

[2] Ibid.

[3] The President of Haiti, Jovenal Moïse, was shot and killed in the middle of the night at his residence by several gunmen. See Sanon & Coto (2021).

[4] For a good overview of federal conspiracy law, see Doyle (2020).

[5] June 25, 1948, ch. 645, 62 Stat. 701; Pub. L. 103-322, title XXXIII, § 330016(1)(L), Sept. 13, 1994, 108 Stat. 2147. In addition to this general conspiracy statute, many other federal statutes contain anti-conspiracy provisions. See, e.g., 18 U.S.C.A. § 1962 (federal RICO conspiracy statute).

[6] The crime or civil offense is referred to by courts as the conspiracy’s “target offense.”

[7] The “overt act” itself need not be an unlawful or wrongful act. Either way, this requirement is a statutory requirement, not a constitutional one. See Whitfield v. United States, 453 U.S. 209 (2005).

[8] See Legal Information Institute, entry for “conspiracy” (not dated), available at As an aside, where no one has committed a criminal act in furtherance of the conspiracy, the punishment varies: some conspiracy statutes assign the same punishment for conspiracy as for the target offense; others impose lesser penalties.

[9] Also worth noting is that conspiracy is a collective or vicarious liability crime: a conspirator can be punished for the illegal acts carried out by the other members of the conspiracy, even if he or she was not directly involved in those illegal acts. In other words, “where one or more members of the conspiracy committed illegal acts to further the conspiracy’s goals, all members of the conspiracy may be held accountable for those acts.” See, e.g., Peterson, et al. (2021), p. 10.

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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