
Long Bets by Confidence Level - raleighm
https://www.jefftk.com/p/long-bets-by-confidence-level
======
wpietri
Hi! I wrote the original software for Long Bets some years ago. I can't speak
officially about the project, as I was just a coder. But maybe my take here is
useful.

I enjoyed the article, and think the analysis is correct as far as it goes. If
your goal is to donate maximum dollars in the future, a Long Bet may not be
your best choice. I just think that's rarely the goal.

The main issue here is that nobody does a Long Bet so that their charity gets
more money eventually. The Long Now's mission is to promote long-term
thinking. Long Bets in specific promotes clarity and accountability via
carefully-stated long-term predictions and bets.[1] Take, for example, Bet id
362: [http://longbets.org/362/](http://longbets.org/362/)

St. Warren of Omaha was not trying to maximize money to his charity. He has
approximately infinite dollars; this was a rounding error. He was trying to
make a point very publicly. He thought that hedge funds were generally
horseshit, and that most investors would do far better making simple,
straightforward choices rather than giving their money to people who promised
to do wonders: [https://money.cnn.com/2018/02/24/investing/warren-buffett-
an...](https://money.cnn.com/2018/02/24/investing/warren-buffett-annual-
letter-hedge-fund-bet/index.html)

What he was buying was not a specific dollar gain, but a clear, visible test
of contrasting views. And it worked wonderfully; this bet was in the news off
and on for more than 10 years.

I believe another goal of most people doing a Long Bet is to support the idea
of long bets and long-term thinking, so I suspect that they look at the Long
Now's rake as another donation to a charity they like. This analysis values
that at zero.

I'd note also that for truly long-term bets, this analysis discounts the fact
that the bettors will be dead. I think our current longest bet runs from
2002-2150. For a mere $1000, I doubt there's a donor-advised fund in the world
that will agree to act as trustee for 150 years, selecting the most
appropriate charity at the time of resolution. And of course no DAF will
provide the clear record and eventual judging of a bet.

And really, if one's goal is giving money to charity, I suspect the best thing
to do is give the money now. Whatever need they're addressing is presumably
urgent enough that they'd rather spend the money today than put it in a long-
term fund. And if it isn't (as is perhaps the case with the B-612 Foundation
[2], which is saving up for a satellite), the charity in question is probably
a better judge of exactly how to invest the money until they're ready for it.
At the very worse, they money could be given with the restriction that it be
used as an endowment.

So I look at this analysis as a good start, but definitely not complete given
who actually uses the service.

[1] It's very much in the spirit of the Erlich wager:
[https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager](https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager)

[2] [https://b612foundation.org/](https://b612foundation.org/)

~~~
jessriedel
> The Long Now's mission is to promote long-term thinking. Long Bets in
> specific promotes clarity and accountability via carefully-stated long-term
> predictions and bets.

Unfortunately, they completely undermine this when they allow bets/predictions
to remain on the website even after a challenger has agreed to take the other
side of the bet but the original poster declines to participate. Long Now
does't even make a note of this online.

> Take, for example, Bet id 362:

Note for other: this is a highly unusual example, since it's the most high
profile bet on the site.

------
gwern
I did something similar last year with [https://www.gwern.net/Long-
Bets](https://www.gwern.net/Long-Bets) . The even-odds restriction is a major
one, and I think sabotages all of LB's goals. Why do prediction markets like
PredictIt do more in a week or so than LB has done in almost two decades? It's
hard to say that LB has been more of a success in getting people to put their
money where their mouth is or bringing more rigor to public discourse (compare
how often PredictIt or other betting markets are cited in political analysis
to how often LB is cited... ever).

~~~
jessriedel
I agree with your complaints and indeed years ago I independently wrote an
email to LB complaining about the fact that predictions could remain on the
site even after challenges had been rejected. However, directly comparing LB
to PredictIt seems unfair. LB is just not a big priority for the Long Now
Foundation, and I expect it took vastly less investment to launch or for
continued operating expenses. It's not surprising it accomplished less.

Edit (in response to your edit, I think): Sure, public exposure has not been
commensurate with contribution. Not shocking, but frustrating.

~~~
gwern
> LB is just not a big priority for the Long Now Foundation, and I expect it
> took vastly less investment to launch or for continued operating expenses.
> It's not surprising it accomplished less.

Sure, it's not a priority - _now_. Because it failed. But it had quite a
splashy launch and they had high hopes and really pulled in their board of
luminaries for the initial batch of predictions. It launched so long ago it
could have dominated any emerging online prediction markets. It had the
opportunity, a useful goal, a nonprofit backing, tremendous goodwill, and
celebrity. But instead, even something like Augur, a weirdo cryptocurrency
project which formally launched hardly a year ago, will turn over more in a
month or two than LB over 2 decades.

~~~
duskwuff
> But instead, even something like Augur, a weirdo cryptocurrency project
> which formally launched hardly a year ago, will turn over more in a month or
> two than LB over 2 decades.

Maybe I'm just missing something, but Augur seems pretty dead to me? I only
see three bets currently open (one about the UK general election, two about
NFL games).

That being said, the Long Bets project was always about high-profile
_individual_ bets, not the larger markets that Augur seemed to be trying for.

~~~
gwern
What are you looking at,
[https://predictions.global/](https://predictions.global/) ? An estimate of
$2.6m at stake sounds pretty good to me, compared to LB which has like $40k at
stake right now.

It's also worth noting that as part of the migration to Augur 2, Augur 1 is
supposed to be gradually shutting down:
[https://www.augur.net/blog/v2-transition-
update/](https://www.augur.net/blog/v2-transition-update/)
[https://www.augur.net/blog/v1-cutoff-
update/](https://www.augur.net/blog/v1-cutoff-update/) So that may be reducing
activity.

~~~
duskwuff
I was looking at the site that's linked from the augur.net home page, which
now only lists two markets:

[https://cloudflare-
ipfs.com/ipfs/QmaM5kLjo21i2eCSiaDQh4S1dG4...](https://cloudflare-
ipfs.com/ipfs/QmaM5kLjo21i2eCSiaDQh4S1dG4vUdFkgKYQjQUiD66wHg/?ethereum_node_http=https%3a%2f%2feth-
mainnet.alchemyapi.io%2fjsonrpc%2f7sE1TzCIRIQA3NJPD5wg7YRiVjhxuWAE&augur_node=wss%3a%2f%2fpredictions.market:9002#!/markets)

I don't know enough about Augur to understand what the difference between the
two sites is. What does seem strange to me, though, is that predictions.global
claims that $2.6M is at stake, but the top 10 markets sorted by "money at
stake" only sum up to roughly $288k at stake. (The last one in the list is
under $1k, too, so I have a hard time believing that the remaining $2.3M is
all in the long tail.)

------
flixic
The humany truth is that public bets, particularly long bets, are less about
making profit and more about stating your view boldly and publicly. Within
this context opportunity costs barely matter.

~~~
klenwell
Just to underscore the point I understand you to be making:

 _Good name in man and woman, dear my lord,

Is the immediate jewel of their souls:

Who steals my purse steals trash; ’tis something, nothing;

’twas mine, ’tis his, and has been slave to thousands;

But he that filches from me my good name

Robs me of that which not enriches him,

And makes me poor indeed._

[https://www.enotes.com/shakespeare-quotes/who-steals-my-
purs...](https://www.enotes.com/shakespeare-quotes/who-steals-my-purse-steals-
trash)

------
joosters
It seems a bit limiting that they only deal with equal stakes/odds, i.e. we
both bet $1000 for/against an event. Allowing for variable odds would make the
deal better for events which you had less confidence in, solving the problem
highlighted.

~~~
jefftk
Variable odds don't solve the core problem which is that "half the investment
income" is a high enough fee that you need a very large edge before you do
better than just putting the money in a donor-advised fund.

~~~
joosters
Changing the odds is the only way to increase your edge... but admittedly,
that 'half the income' will become a very large fee, such that the odds you
need to offset this would make it unlikely that someone would take the other
side of your bet.

------
blazespin
Binary options meets long bets, interesting idea, but illiquid Markets make
lousy predictions

~~~
joosters
Without variable odds, there is no information here to be discovered, since
there will always be as much money for & against the bets. The liquidity
doesn't come into it.

~~~
retsibsi
Unmatched offers could still provide _some_ information.

------
dtjohnnyb
is 7% a reasonable 90 year return? I would guess closer to 1-2% would be
reasonable over that time frame, which puts you in the black at year 90 even
at 90% confidence.

~~~
jefftk
These are nominal returns, but when you say 1-2% it sounds like you're talking
about real returns?

I use nominal returns in the post because Long Bets keeps half of the
investment income without any accounting for inflation.

