Comment by hamasho
11 hours ago
I hate that many people or even the news and scientists have already started to see the odds of prediction market as fact.
I'm sure in the near future, policy decisions or war strategies will be decided by prediction markets' odds, if they are not already being used.
They're far from facts, but have an important advantage over most other sources: the bettors are motivated to predict truth.
News sources are motivated to get clicks, to appeal to certain audiences, and to retain tribal customers. None of these create incentives for truth. You can seek out smart, well-informed and principled journalists who will prioritize truth-seeking over money-making. There are some. But the fact remains you are relying on character to override incentives. With prediction markets, incentives and truth are naturally aligned. This makes them a powerful and valuable resource imo, even if there is a lot of scumminess that comes along for the ride. The insiders, more than anyone, are contributing to the truth signal.
> the bettors are motivated to predict truth.
But also motivated to bend the truth to their bet as the journalist in Israel found.
on the other hand, similar to that one old assassination page, where you bet on the death date of people, it might encourage someone to make an event happen and thus fabricate the insider knowledge if the price is high enough.
So the feedback from prediction market turns around, so you can essentially buy events if you put enough money in.
They are motivated to pick what they believe is most likely to happen. The develope their idea of what is most likely to happen for the news. The reporters use their bets to wrote stories predicting what will happen.
See the loop?
Reporters have an entirely different incentive -- they're less interested in what will happen than whether or not they get eyeballs on their story.
That's not how it works.
First, you have inside traders. Then, among legitimate bettors, you have smart people using multiple data sources (not just the "news") and doing sophisticated analysis that most journalists cannot do, and are not motivated to do -- again, because their incentives are different.
3 replies →
No? Where's the loop?
See also: https://mason.gmu.edu/~rhanson/futarchy.html