Could Gambling Save Democracy?

With apologies to my colleague and friend Robin Hanson, that is the tentative title of my next project, which builds on my previous work “Betting on Conspiracies,” which is forthcoming in The Journal of Law & Public Policy. By way of example, was 9/11 an “inside job”? Was the 2020 election stolen? Did Trump collude with “the Russians”? In summary, the conventional wisdom is that the spread of conspiracy theories is dangerous to democracy, and a growing chorus of voices are thus calling for direct regulation of social media platforms to counter this threat. Some have even called for the appointment of a “reality czar” (see here, for example) and big tech firms like Facebook have gone as far as to de-platform (i.e. censor) President Trump.

Pause. Isn’t it possible that these drastic measures and proposals (e.g. direct regulation of speech, reality czars, and the de-platforming of elected leaders) pose greater dangers to democracy than conspiracy theorists themselves? The classical liberal in me certainly thinks so! That is why I proposed and outlined a “Conspiracy Theory Betting Market” in my previous work. In brief, instead of censorship or reality czars, why not allow people to place actual money bets on the truth values of various conspiracy theories, however far-fetched these theories may seem? It is my contention that a betting market in conspiracy theories would aggregate all available information about the truth values of such beliefs better than a regulator or a reality czar could.

But how would such a “Conspiracy Theory Betting Market” work in practice? Unlike a prediction market, in which participants place bets on the occurrence or non-occurrence of future events, my proposal involves the “retrodiction” of past events, such as the 2020 election, 9/11, and the assassination of JFK. Accordingly, next month I will devote considerable time and effort to the design of my “retrodiction” market and share my findings here …

A short history of conspiracy theories – listen to part three of our expert  guide

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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3 Responses to Could Gambling Save Democracy?

  1. Speaking of prediction markets, check this out https://polymarket.com/.

    It is apparently a sponsor of my favorite Cryptocurrency podcast.

  2. crea8ive53 says:

    That’s what we need — more “derivates” and less reality. See 2008.

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