I presented my Hayekian-inspired “truth markets” idea (see here and here) at the annual Loyola (Chicago) ConLaw Colloquium earlier this month (Saturday morning of 5 November). By way of background, my truth market would operate as a “retrodiction market” and would specialize in conspiracy theories, fake news, etc. On this market, people could buy or sell belief contracts, allowing them to bet on the truth values of their favorite conspiracy theories, for example. With enough bettors representing a wide variety of views, the price of each belief contract should reflect the truth value of the conspiracy theory being bet on.

Lucky for me, I received a lot of excellent comments during the Loyola colloquium. Here, I will share some of this feedback with my loyal followers. To begin with, Enrique Armijo, a law professor at Elon University, brought to my attention a series of essays published by the Knight First Amendment Institute on “Lies and the Law,” including an essay by my co-panelist (!) Helen Norton on “Distrust, Negative First Amendment Theory, and the Regulation of Lies.” Likewise, David Sloss, a law professor at Santa Clara University, brought to my attention a book by Yochai Benkler, Robert Faris, and Hal Roberts on Network Propaganda: Manipulation, Disinformation, and Radicalization in American Politics (Oxford U Press, 2018). As it happens, Professor Sloss is also the author of Tyrants on Twitter: Protecting Democracies from Information Warfare (Stanford U Press, 2022). Suffice it to say, I will study these works closely and report back soon.

For his part, Mark Graber, a law professor at the University of Maryland, identified two functions of betting markets: (1) profit seeking, such as the market for grain futures, and (2) entertainment or enjoyment, such as a placing a bet on one’s favorite sports team. He then placed my proposed “truth market” in the second category and expressed concern with the possibility of market manipulation, providing the following example: Dan Snyder placing a large bet on whether he will be forced by the NFL to sell the Washington Football Team. (As an aside, my tentative reply is so what? If Snyder places a huge bet to move the market price in his preferred but false direction, other bettors will spot this opportunity and place more rational bets at Synder’s expense!)

Most of my commentators, including Jon Garon (Nova), Kyle Langvardt (Nebraska), and David Sloss (Santa Clara), also expressed concern about the fact that my truth markets would never close but remain open indefinitely. Some of these scholars suggested the creation of a non-governmental body, such as a third-party, independent fact-checker, who would decide on the accuracy of the beliefs being bet on. (Alas, my reply here is that such an expert entity is a non-starter. Who would pick these experts, and who would trust their judgements?) The most serious objection to my truth market proposal, however, was put forward by David Schraub, a law professor at Lewis & Clark University. I will describe his objection in my next post.