The Metaculus point scoring system incentivizes* middling predictions that would earn you points no matter the outcome (or at least provide upside in one direction with no point downside if you’re wrong) so that would encourage participants with no opinion/knowledge on the matter to blindly predict in the middle.
Harder to explain with real money markets, but Peter’s explanation is a good one. Also, for contracts closing several months or years out where the outcome is basically known, they will still trade at a discount to $0.99 because time value of money and opportunity cost of tying up capital in a contract that has very low prospective ROI.
*Haven’t been on the site in a while but this was at least true as of a few months ago.
The Metaculus point scoring system incentivizes* middling predictions that would earn you points no matter the outcome (or at least provide upside in one direction with no point downside if you’re wrong) so that would encourage participants with no opinion/knowledge on the matter to blindly predict in the middle.
Harder to explain with real money markets, but Peter’s explanation is a good one. Also, for contracts closing several months or years out where the outcome is basically known, they will still trade at a discount to $0.99 because time value of money and opportunity cost of tying up capital in a contract that has very low prospective ROI.
*Haven’t been on the site in a while but this was at least true as of a few months ago.