NunoSempere
No bio...
User ID: 1101
Thanks for the comment. Some points:
actual large stakes betting
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.
actual financial, governmental and business markets
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.
how would one extract any value from it
Not all goods are rival, not all games are zero sum. E.g., people can and do get value from weather forecasting.
alter the very things it is trying to predict
Sure. You do have fixed point problems. You can also make predictions conditional on a level of investment. It's still a consideration, though.
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)).
- Prev
- Next
I mean, in practice you don't need 99.9, you need better than alternatives in at least some cases.
More options
Context Copy link