Stance
Stance

The economy would grind to a halt if you had to check each transaction for claims you were comfortable accepting.

Instead, we can allow market participants to set stances that discount claims.

⁠

Philip Morris

⁠

agreed to pay

$100.00

⁠

John

⁠

John

⁠

‘s stance discounts the claim “Cigarettes are benign.” at

100%

⁠

000

⁠

dollars of the

$100.00

⁠

payment to

John

⁠

was trusted in “Cigarettes are benign.”

The payment to

John

⁠

would be:

premium:
`25.00`
⁠
total:
`125.00`
⁠
⁠

Here’s how the total payment changes as the stance discount gets bigger

⁠

000

100

⁠

← How many dollars of the payment are discounted?

⁠

Need help interpreting the graph?

If you set the dollars priced to $100:

⁠

then hover your mouse over over 96%

⁠

this tells you that $100 of the $100 payment (100%) is intrusted in a claim that’s 96% discounted (the percentage you can see). This means that this small $100 payment would cost a total of $2,500 to send since there’s so much disagreement. $100 from the original payment plus $2,400 due to the disagreement premium.

You can see that this strongly incents you to have lightly held stances when there’s disagreement and for beliefs to be widely accepted before they are strongly held.

This simulates the disagreement premium for a payment containing a single priced claim. Handling multiple priced claims isn’t difficult. If you have two priced claims you just sum up the disagreement premiums.

⁠

This is the equation that sets the Disagreement Premium:

To read more about why this is the equation, go see