NunoSempere
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User ID: 1101
NunoSempere
1d ago
Do people trust that whatever entity is reporting the final results is doing so accurately
- Scoring rules exist
- Deceivers outcompete nondeceivers
- But yeah, you can't use a prediction marketplace to decide on something that's more valuable than the value of the whole prediction marketplace. That's one of the issues with Robin Hanson's futarchy.
doubt we'll ever reach 99.9% confidence in prediction markets
I mean, in practice you don't need 99.9, you need better than alternatives in at least some cases.
NunoSempere
1d ago
The last one is: I agree that sometimes predictions influence what happens. A few cases people have studied is alarmist Ebola predictions making Ebola spread less because people invested more early on, and optimistic predictions about Hillary Clinton leading to lower turnout.
You can solve these problems in various ways. For the Ebola one, instead of giving one probability, you could give a probability for every "level of effort" to prevent it early on. For the Hillary Clinton one, you could find the fixed point, the probability which takes into account that it lowers turnout a little bit (https://en.wikipedia.org/wiki/Fixed_point_(mathematics)).
Thanks for the comment. Some points:
To quantify this, there are some markets in which you can bet >100k, particularly around US elections. Kalshi is also trying to change this in the US. But yeah.
Different niche, though. One important difference is that in normal markets "the market can stay irrational longer than you can stay solvent". Not so in prediction markets/forecasting questions: there is a definite date.
Not all goods are rival, not all games are zero sum. E.g., people can and do get value from weather forecasting.
Sure. You do have fixed point problems. You can also make predictions conditional on a level of investment. It's still a consideration, though.
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