Prediction markets as commitment devices

I’ve been fiddling around with Manifold Markets lately and wondering about the possibility of using prediction markets as commitment devices. I haven’t actually done this yet but I’d like to give it a go.

The way I see it, it’d work like this:
Say I want to commit to writing a book by some deadline.
I start a prediction market that resolves ‘yes’ if I finish it in time, and I put all my ante money on ‘yes’ so that I get my money back if I succeed and lose it if I don’t, with the amount being somewhat proportional to how much I wanna get it done. (So far a pretty standard commitment device).
Then other people can bet against me, standing to gain the money I’ve put at stake if I fail to complete it, and increasing the money I stand to gain if I succeed.

The biggest benefit of this kind of commitment device that I can see is that the rewards/motivation scale in proportion to how much I need it! If it’s likely that I’ll get the book finished anyway, not many people are going to bet against me, so the market ends up being a small amount of motivation that I didn’t really need. But the more likely I am to fail, the more people bet against me, the more reward money I get if I succeed!

Other pros:

  • If you want to read my book, you can pay me to write it by betting that I won’t, and you’re guaranteed to either get what you paid for or get your money back plus interest
  • Easily adaptable to team commitments - get everyone on a team to place a large bet in favour of your collective success, and they’ve suddenly all got shared stakes in achieving a clear outcome with a clear deadline, something many managers can only dream of (alternatively just agree to share the profits)
  • If partial success is possible (maybe I want to finish as much of the book as I can), resolving the market to a clearly defined percentage of success maintains the incentive to complete as much of the project as possible even if 100% success isn’t feasible

Cons:

  • Only works for public commitments
  • Potentially allows people to profit by sabotaging me?
  • There still doesn’t exist an easy-to-use, real-money, anyone-can-make-a-market prediction market platform - best you can do right now is play money on Manifold or similar
  • Requires people to have some knowledge of how likely you are to succeed - which, if you want people outside your immediate social circle to bet, requires you to post updates of your progress or something similar.
    (This one’s possibly more of a feature than a bug - accountability can be a good thing!)
  • Requires bettors to be well-calibrated - if they overestimate your chances, you won’t get as much motivation as you might need. If they underestimate you, you might get discouraged? Or you might just make more money…
    I feel like this one shouldn’t be much of an issue, especially if you keep making more commitments - it’ll soon become clear how reliable you are.

Another way of thinking of this is as a form of both epistemic and disciplinary rigour - sort of a combo of the commits.to principle of making a note whenever you say you’ll do something and the principle of being willing to bet on your beliefs, committing using a prediction market is sort of a way of betting on your own reliability.

This could also be a great way to choose between multiple projects: if I make 10 markets for potential projects conditional on my actually attempting them, there’ll be some kind of spread between easy-to-finish projects with lower rewards and harder-to-finish ones with higher rewards, letting me choose one that’s easier, or more difficult, or one where’s it’s genuinely ambiguous whether I’d succeed if I tried.

I’ve noticed one person make a personal will-I-achieve-this goal on Manifold, but the initial probability was set to 50%, meaning the market maker’s success lost them money!

Has anyone else tried this, or would anyone be willing to?

5 Likes

Emphatic yes from me! Beautifully advocated, btw. Maybe you could formulate this as a prediction that this idea will catch on and post it as a market? I will bet a lot of mana on it if you do (and thus be motivated to help evangelize it!).

See also:

PS, I should mention that something like this but more ad hoc, auctioning commitment contracts among friends/family, is how Beeminder first started.

2 Likes

Done! Here’s the market: Will the 'Commitments' community have 50 or more markets by 2022-06-01? | Manifold Markets
Wasn’t sure what the right amount to aim for was but 50 doesn’t seem too unattainable?

PS, Didn’t know that about Beeminder’s origins! Funny how these things come full circle…

1 Like

Another pro - you can up the stakes any time by just betting more on yourself.

1 Like

Update: I drove the price up to 99%. I don’t believe it’s literally that high so y’all should take my money!

1 Like

Didn’t realize Manifold was one of the play money ones, never mind!

1 Like

@dreev I noticed you’ve bet on some of the markets I made to test the idea! I appreciate the support and can’t help laughing that the supportive thing to do is to bet against me :laughing:

I also noticed that on at least one of them, someone (not me) immediately undid your bet by buying YES, which means I won’t actually get your money if I succeed, while you get more money if I don’t…
I guess the whole ‘pay me to stick to my commitment’ thing requires buying of YES to be restricted to those actually making the commitment. If the market’s efficient enough, you’re actually just buying insurance.

1 Like

I suppose another way of thinking of it is that if someone buys YES, they’re incentivised to support me, so if the market reverts you’re paying for me to receive more support? I mean, I don’t expect whoever did it to actually help me read more books, but I suspect that would change at least a little if there was actual money at stake. Even just getting people to check that I’m making progress helps.

1 Like

All the Beeminder-relevant markets on Manifold I know of so far:

  1. Which Beeminder feature/project will have the highest ROI? | Manifold Markets
  2. Will we (Beeminder) deem it prudent to make it harder to turn No-Excuses Mode back off after you opt in to it? | Manifold Markets
  3. Will this trial find that paying people to lose weight results in more weight loss than usual care? | Manifold Markets
  4. Will the 'Commitments' community have 50 or more markets by 2022-06-01? | Manifold Markets
  5. Commitments | Manifold Markets
2 Likes