I am interrupting my multi-part series on “Coase and the Constitution” to let everyone know that I have posted to SSRN a revised version of my latest paper, which is now titled “The Gödel Conspiracy” and which will be published in The Journal of Law & Public Policy in the spring. In summary, I retell the story of Godel’s belief in a worldwide, centuries-long conspiracy to suppress the work of Gottfreid Leibniz (pictured below, left), showing how even the greatest logician since Aristotle could engage in conspiracy thinking, and I propose a solution for dealing with conspiracy theories today: a retrodiction conspiracy theory market. But at the suggestion of Professor Steven J. Brams, I made one significant revision to my paper: I replaced my proposed “conspiracy theory court” with a more simple and elegant solution. Specifically, instead of appointing an external arbiter to resolve the truth or falsity of any given conspiracy theory, let’s just keep the conspiracy theory market open indefinitely. That way, any bettor can opt out at any time, pocketing his winnings if the current price is above what he paid for his bet (either for or against the conspiracy) or taking a loss at the current price. In summary, the logic of keeping the market open indefinitely, instead of appointing an arbiter, is that bettors will presumably stay in if they think the price of their bets will increase, or they can opt out if they think the price will fall. The price will therefore track aggregate belief or non-belief in any given conspiracy theory, with no necessary final resolution, and as Professor Brams pointed out to me, bettors would still have an incentive to seek new information, information that not only supports their choice but that is also likely to persuade other bettors, thereby advancing the search for the truth.
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