Transcript The ethics of predicting terrorism with markets

COST OF 9/11
•
Up to 42,000 human lives
• ~3,000 on 9/11
• ~3,000 increased road deaths post 9/11
• ~3,000 coalition soldiers in Afghanistan
• ~3,000 civilian deaths in Afghanistan
• ~30,000 Taliban deaths in Afghanistan
•
Up to 7trillion US dollars ($7,000,000,000,000)
• ~$100,000,000,000 lives & property on 9/11
• ~$2,000,000,000,000 in stocks, tourism etc.
~$5,000,000,000,000 for war in Afghanistan
•
Psychological costs
Dan Weijers
3/12/2012
Introduction 1
WHAT ARE THE CHANCES OF A WMD ATTACK?
Total volume >1,300
Dan Weijers
Lowest = 5%
Highest = 59%
3/12/2012
Current = 12%
Introduction 2
PLAN OF ATTACK
Talk Plan
Argument
• Prediction markets
• Many moral concerns are
non-issues or minor issues
• PAM
• Other PMs
• Several moral concerns
• Betting on death
• Wisdom of repugnance?
• Manipulation is main worry
• Potential benefits are huge if
it works
• US gov (or NATO?) should test
• Ethical assessment
Dan Weijers
3/12/2012
Introduction 3
HOW PREDICTION MARKETS WORK
•
http://www.intrade.com/v
4/markets/?eventClassId
=82
•
https://www.ipredict.co.nz
/app.php?do=portfolio
• Aggregating diverse
knowledge
• Market aspect
captures credence
• Pay vs. play
Dan Weijers
3/12/2012
Prediction markets 1
PREDICTION MARKETS & ACCURACY
• Wisdom of the crowd
• Marble #
• cow weight estimating
• Better than polls and
“experts” in some
domains
• Depends on
• # of participants
• Diversity of participants
• Participants access to
“new information”
Dan Weijers
3/12/2012
Prediction markets 2
PREDICTING TERRORISM
• DARPA  funds  FutureMAP  includes sub-project  PAM
Dan Weijers
3/12/2012
PAM 1
THE MAIN METHOD OF PREDICTING TERRORISM?
Supposedly better
than:
• Reports
• Delphi
• Experts
• Polls
Dan Weijers
3/12/2012
PAM 2
THE FALLOUT
•
•
Less than positive comments:
• “just wrong”
• “ridiculous… grotesque,”
• “defies common sense”
• “absurd… disgusting”
• “loopiest manifestation of…
belief… markets [can] solve all
problems”
• “a new level of absurdity”
• “despicable… callous… retarded”
• “unbelievably stupid”
FutureMAP terminated asap
Dan Weijers
3/12/2012
PAM 3
PRIVATE GROUPS TAKE OVER
• Future Exchange
• Play money
• Small
• Open to all
• Intrade
• Unlimited money
• Large
• Open to most, but not US now
• Ipredict
• $10,000 net limit on money in
• Small/med
• For NZers
Dan Weijers
3/12/2012
Other PMs 1
INTRADE
WMD TERROR ATTACK
• Open interest: 709 shares
• Life high: $5.99 ≈ 59.9%
• Open price: $1.15 ≈ 11.5%
• Total volume: 1,314 shares
• Life low: $0.50 ≈ 5.0%
Dan Weijers
3/12/2012
Other PMs 2
IT WON’T WORK
• “a new level of absurdity... almost seems
a mockery of itself.”—Stiglitz
• The actual likelihood of the event can be
influenced by the market price
• E.g. terrorists see the ‘heat is on’ and
reschedule their attack
• Open question
• Assume it works for this talk
Dan Weijers
3/12/2012
Several Moral Concerns 1
FUNDING THE WRONG THING
• “If our intelligence agencies are that
incompetent, shouldn’t we be more concerned
with improving the intelligence than setting up
some goofy-ass online casino?”—Blogger Greg
Saunders
• Budget for trial of FutureMAP was 1-5 million
US$
• This goofy-ass casino might be what improves
intelligence
• Non-issue
Dan Weijers
3/12/2012
Several Moral Concerns 2
ENCOURAGING TERRORISM
• “Most traders try to influence their
investments”–Sen. Daschle
• Could cause people to commit acts
of terror to make a quick buck
• Less risky ways to make money
• Could make money from stock
market anyway
• Non-issue
Dan Weijers
3/12/2012
Several Moral Concerns 3
TERRORISTS WILL USE IT TO TRICK US
•
“[T]errorists themselves could…
make false bets to mislead
intelligence authorities.” –Wyden
and Dorgan
•
Prediction markets very resistant
to manipulation
• But maybe not for terrorist
events
•
Potential major issue
• Should be investigated further
Dan Weijers
3/12/2012
Several Moral Concerns 4
FUNDING TERRORISTS
•
“Would be assassins and
terrorists could easily use…
clever trading strategies to
profit from their planned
misdeeds.”–Pearlstein
Paying bad guys for the
greater good
• Paying informants
• Paying ransoms
• It’s a big risk for terrorists
• They make their chances of
getting caught higher…
• A minor issue
•
Dan Weijers
3/12/2012
Several Moral Concerns 5
THE REPUGNANCE OF BETTING ON DEATH
“[T]he fact that our
government is essentially
setting up a terrorist
bookmaking operation is
despicable.”–Blogger Greg
Saunders
Betting on death isn’t new
•
Life insurance
•
Military spending
decisions
•
Non-issue unless…
Dan Weijers
3/12/2012
Betting on Death 1
HOW WOULD YOU LIKE IT?
•
•
•
Death pool
Imagine a contract:
• On your death or assassination
• On a WMD attack on your city
• On your PM’s assassination?
Depends on if you were already a target
Dan Weijers
3/12/2012
Betting on Death 2
INNOCENTLY PROFITING FROM TERRORISM
• Anyone profiting from successful acts of
terrorism seems wrong…
• But many non-terrorists already accidentally
profit from terrorism
• People who specialise in
monitoring/preventing terrorism
• Some stocks
• Some businesses
• Accidental profiting is a non-issue
Dan Weijers
3/12/2012
Betting on Death 3
PURPOSEFULLY PROFITING FROM TERRORISM
• Believing there will be a terrorist attack
and deciding to profit from it
• Trying to benefit from an immoral act
• Analogy: Using Nazi medical research?
• Different motives: help others vs.
self?
• Seems repugnant when done to benefit
self
• But what is immoral about it?
• Who or what is harmed?
Dan Weijers
3/12/2012
Betting on Death 4
WISDOM OF REPUGNANCE?
• …Or knee-jerk moralising?
• Person-affecting
• Desensitised to terrorism  become terrorist?
• Some people would find it offensive
• Virtue ethics (character-tarnishing)
• Analogy: violent computer games?
• Disrespect of an important ideal
• Life, peace, freedom?
• Analogy: blasphemy?
Dan Weijers
3/12/2012
“Shallow are the
souls that have
forgotten how to
shudder.”—Leon
Kass
Wisdom of Repugnance? 1
MOTIVATIONS & MORAL EFFECTS
Moral
effect
Effect on
character
Motivations
$$
Induce greed,
callousness,
schadenfreude/mild
sadism
Disrespect Life, peace,
of ideals
freedom
Status
Fun
Manipulative
Informative
Induce pride,
callousness,
schadenfreude/mild
sadism
Induce
callousness,
schadenfreude/mild
sadism
Dishonesty,
callousness,
(morbid
curiosity?)
Beneficence
Life, peace,
freedom
Life, peace,
freedom
Life, peace,
freedom
Respect for
life, peace,
freedom
“PAM… should prove as engaging as it is informative.”—Official PAM website
Dan Weijers
3/12/2012
Wisdom of Repugnance? 2
THE HARMS OF PMS ON TERRORISM
• So PMs on terrorism could:
• Desensitise people to the point they become
terrorists
• Offend some people
• Encourage greed, pride, callousness,
schadenfreude/mild sadism, dishonesty, morbid
curiosity, and beneficence
• Disrespect the ideals of life, peace, and
freedom
• … just like computer games?
Dan Weijers
3/12/2012
Wisdom of Repugnance? 3
WISDOM OF REPUGNANCE?
•
So PMs on terrorism could:
• Desensitise people to the point they become
terrorists
• Disrespect the ideals of life, peace, and
freedom
• Encourage greed, pride, callousness,
schadenfreude/mild sadism, Dishonesty,
callousness, morbid curiosity, and
benificence
• … just like computer games?
Dan Weijers
4/12/2012
Betting on Death 1
HOW SERIOUS ARE THE HARMS?
• Desensitise people to the point they become terrorists
• Very serious but very very unlikely
• = Non-issue
• Disrespect the ideals of life, peace, and freedom
• Not very serious (?) but very likely
• Encourage greed, pride, callousness,
schadenfreude/mild sadism, dishonesty, morbid
curiosity, and beneficence
• Not very serious (effects on character will be tiny)
but very likely
• Offending some people
• Not very serious but very likely
Dan Weijers
3/12/2012
• = Minor issue
• = Minor issue
• = Minor issue
Wisdom of Repugnance? 4
ETHICAL ISSUES SCORECARD
Compared
to no PMs
Offensive
Character
tarnishing
Ideal
disrespecting
Might fund Terrorists
terrorism
manipulating us
Likely to
produce
useful
information
Govt. only
PM
No
No
No
No
No
Yes ?
PAM
Yes
Yes
Yes
Yes
Maybe
Yes ??
Intrade
Yes
Yes
Yes
Yes
Unlikely
Maybe ??
Net
Exchange
Yes
Yes
Yes
No
Unlikely
No ?
Minor
issue
Minor
issue
Minor
issue
Minor
issue
Potential
Major
major issue benefit
Dan Weijers
3/12/2012
Ethical Assessment 1
ETHICAL ASSESSMENT
Compared to
no PMs
Issues that
should cause
repugnance
Terrorists
Likely to
manipulating us produce useful
information
Net benefit?
Govt. only PM
None
No
Yes ?
Definitely
PAM
4
Maybe
Yes ??
Probably
Intrade
4
Unlikely
Maybe ??
Unlikely
Net Exchange
3
Unlikely
No ?
No
Minor issues
Potential major
issue
Major benefit
Dan Weijers
3/12/2012
Ethical Assessment 2
ADVANTAGES OF FUTUREMAP OVER OTHER PMS
Both (govt. only PM and PAM)
• Control over predictions (more useful to prevent terrorism)
• Gather other relevant information
• No trading or sign up fees necessary (better market conditions)
• Aggregation benefits
PAM
• Real money (better accuracy)
• Can run controlled experiments on manipulation
• Less trivialisation (focus on information, not fun)
Dan Weijers
3/12/2012
Ethical Assessment 3
CONCLUSION
Investigate possibility of manipulation
• If some predictions seem robust vs
manipulation, then…
Test FutureMAP
• Make sure the test is big and international
• Diverse ‘new’ knowledge
• 100s of terrorist attacks in world per year,
but not many in US
• Don’t advertise it as “engaging”
Dan Weijers
3/12/2012
Ethical Assessment 4