If you generate predictions by looking up market values, that means three things:
You’re never going to make any money on the market, not even a tiny bit
You’re never going to contribute to the market
You’re never really going to learn what the market knows about underlying causes
Because of (2), if everyone did this, there would be no market.
You need your own machine for generating predictions. Here, I’m borrowing a metaphor from Ronny Fernandez, who says that he keeps track of predictions because he needs to debug the program that generates them.
You don’t need to believe the resulting predictions. You can make predictions like, “I think that the probability of a Trump re-election is .99 times the probability assigned by this prediction market, plus .01 times the probability output by my machine.” You basically believe the market’s prediction, but have some small way of contributing.
I think (3) is more important though. If the market is consistently right about something, there exists a machine that outputs good predictions. That machine may even be a causal model that gives you some deep insight about the world. And you’re never going to have it in your head if all you do is make market-based opinions.
So I think that’s another sense of “you have a right to be wrong.” You have a right to keep tinkering with your own prediction-machine in your garage, even if it’s not yet competitive with the finished products on the market.
If you generate predictions by looking up market values, that means three things:
You’re never going to make any money on the market, not even a tiny bit
You’re never going to contribute to the market
You’re never really going to learn what the market knows about underlying causes
Because of (2), if everyone did this, there would be no market.
You need your own machine for generating predictions. Here, I’m borrowing a metaphor from Ronny Fernandez, who says that he keeps track of predictions because he needs to debug the program that generates them.
You don’t need to believe the resulting predictions. You can make predictions like, “I think that the probability of a Trump re-election is .99 times the probability assigned by this prediction market, plus .01 times the probability output by my machine.” You basically believe the market’s prediction, but have some small way of contributing.
I think (3) is more important though. If the market is consistently right about something, there exists a machine that outputs good predictions. That machine may even be a causal model that gives you some deep insight about the world. And you’re never going to have it in your head if all you do is make market-based opinions.
So I think that’s another sense of “you have a right to be wrong.” You have a right to keep tinkering with your own prediction-machine in your garage, even if it’s not yet competitive with the finished products on the market.