Overview

Since speculative markets excel at a task where democracies struggle, we might try to improve democracy by having it rely more on speculative markets. Robin Hanson

Futarchy was invented by economist Robin Hanson in 2000. The basic idea is to make decisions via markets.

It does this through decision markets. In a decision market, you speculate on what an asset would be worth if an organization took a specific decision. For example, you could speculate on what the value of AAPL would be if Apple fired Tim Cook.

Futarchy then uses the prices in these markets to make decisions. For example, a company organized as a futarchy would fire the CEO if the decision markets say that this would increase the value of that company's stock.