One thing I’ve picked up from everyone’s favorite stable of bloggers at the George Mason economics department is that you should be willing to bet on your beliefs. If you really believe in what you are saying, it is taking easy money; if not, shut up. I think this would be useful in our world of interminable online arguments. It improves the accuracy and precision of your beliefs, and it forces others to face up to theirs.
The heart of it is nailing down just what it is that you (or others) believe. Many of your ideas exist as fuzzy generalities that have no application to the world because they are insufficiently well defined for there to be any counter-evidence. If mutually exclusive options are both consistent with what “you know,” you don’t really know anything.
The first part is exactly that testable condition: what state of affairs would prove you wrong? If you think the sun always rises in the morning, you should be willing to bet that it will rise tomorrow. If you think 2010 is the year of Aion, you should be willing to bet that it will have X subscribers at the end of the year (or some other measure that you can get more easily). This is where many people will start backing off. Yes, you believe that Hot New MMO will be the WoW-killer, but “due to marketing” you are unwilling to bet that it will have more subscribers in the first year. There is always a face-saving excuse. Accept that if you need to backtrack to a softer position while betting, your true belief is that softer position, rather than the claim you were advancing. People who want bets with terms ridiculously in their favor or are unwilling to admit that any possible state of affairs would prove them wrong are just making useless noise.
The second part is that the odds you demand show how certain you are. If you need even odds, you must think it is a 50-50 chance. If you really are 99% sure, you should be willing to bet on that basis and take easy money while giving someone at least 90-to-1 odds. This is where many people back further off. Yes, he said he was absolutely certain, but he will not even give 2-to-1 odds. If someone will not take easy money, he is just making useless noise. For your own epistemology, this is a great chance to see just how certain you are about your own beliefs. If you would not give 9-to-1 odds on a claim, you are not really 90% certain. Accept that you hold more tentative beliefs than you are willing to claim on internet forums.
The best of these are on quantitative variables: at what points would you give even odds, two-to-one odds, ten-to-one odds? This lets you determine how precise your beliefs are by seeing how much spread you need to get to 50%, 66%, or 90% certainty. Take WoW’s subscribers as an example. Would you give 100-to-1 odds that WoW has more than one million subscribers on December 31, 2010 (assuming the game still exists, to bar outrageous fortune)? Most likely. What number is your break even, no idea whether it will have more or fewer? Establishing that range makes your belief about whether WoW is growing or dying something concrete, rather than some vague generality.
I think of this as refining one’s own beliefs, but here on the internet, it would be nice to establish it as a norm just to shut some people up. “This game is dying!” Really? I just did a /who on server X at 5:10pm Eastern and got Y names; let’s take the same time and day of week 4, 8, or 16 weeks down the line and re-/who. If you’re so sure this game is dying, you’ll bet me 100 gold at 2-to-1 odds that the number will be at least 10% lower, right? Then we find out that, no, he wants even odds, and he wants some other basis of comparison (might be fair), and he wants any decrease rather than at least 10%, and really he does not want to bet because [developer] can still pull this out and save the game if it listens to his ideas. So when made concrete, “this game is dying” means “I think there is a 50-50 chance that there might be at least one person fewer logged on a few months down the line.” Wow, with a belief that strong, I can see how you think such drastic changes are necessary.
(An aggressive break-even point can also be a sign of strong belief. If you want even odds that WoW will have more than 7 million US/EU subscribers at the end of 2010, that means you think it is a coin flip whether it goes up or down; if you want even odds at 3.5 million or 10.5 million, that is a strong claim because you have gone all the way to a 50% increase or decrease. In that case, you are probably willing to give 10-to-1 odds on a decrease/increase from the current number.)
Update: slow blog day? We have a lot of comments. Rather than write something longer than the original post, most of the comments that are not just promoting irrationality can be answered with two points. First, I said I think of this as primarily for improving your personal beliefs, so I’m quite happy if you can nail it down to “what would be a fair bet” rather than one you will actually make. At work, I make few bets about our numbers, but I use this as an exercise to determine what I believe and how strongly/precisely. If your beliefs will never be testable, as I said, you are just making noise; if there is no foreseeable point at which your beliefs intersect with reality, they are irrelevant. Second, beyond the existing body of work on prediction markets and futarchy, there is an existing model already in place: the stock market. If your objection’s being true would imply that we could not have a stock market, consider it already refuted by reality.