Betting is staking money (or some other form of value) on one's beliefs. It is considered rationally virtuous to bet on one's beliefs, as the real stakes force one to actually consider precisely what they anticipate will really happen. LessWrong has a culture of betting.

See also: Prediction Markets, Forecasting & Prediction, Forecasts (Specific Predictions)

Why is betting important?

The argument in favor of betting is that one should generally either accept a proposed bet, in order to make money in expectation, or update their beliefs so the bet becomes unprofitable. There are exceptions to this rule, some theoretical, such as the example of Omega and Omicron, and some practical, such as uncertainty about whether the bet will be fulfilled. Offering a bet forces someone to think more carefully and share their beliefs more precisely. Losing a bet, even small, can make it more emotionally visceral in a way that might lead to sharpening belief calibration more. Bets can be made about beliefs that can be immediately verified or about beliefs that will only be verifiable in the future.

In popular culture, this idea is often referred to as "putting one's money where one's mouth is".

A Bet is a Tax on Bullshit mentions that:

In fact, the NYTimes should require that Silver, and other pundits, bet their beliefs. Furthermore, to remove any possibility of manipulation, the NYTimes should escrow a portion of Silver’s salary in a blind trust bet. In other words, the NYTimes should bet a portion of Silver’s salary, at the odds implied by Silver’s model, randomly choosing which side of the bet to take, only revealing to Silver the bet and its outcome after the election is over. A blind trust bet creates incentives for Silver to be disinterested in the outcome but very interested in the accuracy of the forecast.

In What Does the Betting Norm Tax?, Bryan Caplan says that such a norm should also be present among scholars.

Operationalization for Bets

Operationalizing a belief is the practice of transforming a belief into a bet with a clear, unambiguous resolution criteria. Sometimes this can be difficult, but there can be ways around some difficulties as explained in Tricky Bets and Truth-Tracking Fields. The same challenges are present for prediction markets.

Prediction Markets

A prediction market is a way for everyone to participate in betting on a particular question. A positive externality of prediction markets, and to a lesser extent bets, is providing a reliable probability on its questions. It can also act as an insurer. 3 4 Truthcoin, an idea for a decentralized prediction market, has the slogan "Making cheap talk expensive".

Long Bets is also a useful platform to make certain bets.

The purpose of Long Bets is to improve long–term thinking. Long Bets is a public arena for enjoyably competitive predictions, of interest to society, with philanthropic money at stake. The Long Now Foundation furnishes the continuity to see even the longest bets through to public resolution. This website provides a forum for discussion about what may be learned from the bets and their eventual outcomes.

However, Long Bets hasn't good incentives to make long term bets as explained by Jeff Kaufman in Long Bets by Confidence Level.

See also:

LessWiki Bets Registry (outdated)

External links:

Risk aversion does not explain people's betting behaviours
A method for fair bargaining over odds in 2 player bets!