On Radical Markets

41–42 of 42 posts

Re: On Radical Markets

#41

Post by bildung » Thu, Apr 26, 2018, 7:58 AM UTC

glifchits wrote: post #36

bildung wrote: post #20

Earlier quoted context omitted.

* > The solution: users would choose an AI to generate real time valuations.* Sadly this isn't a solution, it just adds another layer of complexity to the decision making process. AI isn't magically unbiased, there's a multitude of ways for human bias/ particular interests to enter the model, from feature selection to model layout up to interpretation of the results. So now people have to be both experts at assessing…

Normally I would agree with you completely, indeed AI is (very) far from perfect. However, I think we're hung up on the home property example. As Vitalik suggests, this proposal works a lot better in situations where the underlying property is more fungible, and the participants in the market are more or less equal. The property example I like from the article is radio spectrum licenses. I'd also add that using an AI…

I actually find the housing problem quite apt, because it so easily illustrates the problem of information asymmetry of the market participants. If you can't guarantee that, you don't have an efficient market. How can you prevent that, if not with the help of protection through law (i.e. regulation)?

Re: On Radical Markets

#42

Post by notahacker » Fri, Apr 27, 2018, 11:05 AM UTC

seiferteric wrote: post #34

notahacker wrote: post #19

Earlier quoted context omitted.

That sounds like a case for absolutely everyone to undervalue their property unless and until someone wants to buy it (and speculators have little incentive to try to buy houses when nobody actually accepts offers at the low rates implied by their tax valuations)

If no one wants to buy your house at the current value then it is by definition not undervalued. To your second point, speculators can put in any offer they want, it doesn't have to be at or right above your current valuation. If you claim your house is only worth 200k and they offer 500k, suddenly you have a tough choice, either sell, or pay a large tax bill.

If I value my property at a dollar, I'm signalling that I don't want to pay property tax and don't have the slightest interest in selling my property either, ergo there is no reason whatsoever for any speculator to waste their time bidding on it (unless the government becomes a property speculator, or somebody with deep pockets really resents my tax avoidance).

Of course, the system also needs a mechanism to deal with the opposite: nuisance bids from people who don't have the will or ability to actually complete the purchase. Buying property is not like buying shares.

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