The market and most of the indicators you mentioned would be dominated by the 60 that placed large bets
I disagree with this. Volatility, liquidity, # predictors, spread of forecasts will all be affected by the fact that 20 people aren’t willing to get involved. I’m not sure what information you think is being lost by people stepping away? (I guess the difference between “the market is wrong” and “the market is uninteresting”?)
What is being lost is related to your intuition in the earlier comment:
if the market is 49.9 / 50.1 in millions of dollars, then you can be fairly confident that 50% is the “right” price.
Without knowing how many people of the “I’ve studied this subject, and still don’t think a reasonable prediction is possible” variety didn’t participate in the market, it’s very hard to place any trust in it being the “right” price.
This is similar to the “pundit” problem where you are only hearing from the most opinionated people. If 60 nutritionist are on TV and writing papers saying eating fats is bad, you may try to draw the “wrong” conclusion from that.; because unknown to you, 40 nutritionists believe “we just don’t know yet”. And these 40 are provided no incentives to say so.
Take the Russia-Kiev question on Metaculus which had a large number of participants. It hovered at 8% for a long time. If prediction markets are to be useful beyond just pure speculation, that market didn’t tell me how many knowledgable people thought an opinion was simply not possible.
The ontological skepticism signal is missing—people saying there is no right or wrong that “exists”—we just don’t know. So be skeptical of what this market says.
As for KBC—most markets allow you to change/sell your bet before the event happens; especially for longer-term events. So my guess is that this is already happening. In fact, the uncertainty index would seperate out much of the “What do other people think?” element into it’s own question.
For locked in markets like ACX where the suggestion is to leave your prediction blank if you don’t know, imagine every question being paired with “What percentage of people will leave this prediction blank?”
I disagree with this. Volatility, liquidity, # predictors, spread of forecasts will all be affected by the fact that 20 people aren’t willing to get involved. I’m not sure what information you think is being lost by people stepping away? (I guess the difference between “the market is wrong” and “the market is uninteresting”?)
What is being lost is related to your intuition in the earlier comment:
Without knowing how many people of the “I’ve studied this subject, and still don’t think a reasonable prediction is possible” variety didn’t participate in the market, it’s very hard to place any trust in it being the “right” price.
This is similar to the “pundit” problem where you are only hearing from the most opinionated people. If 60 nutritionist are on TV and writing papers saying eating fats is bad, you may try to draw the “wrong” conclusion from that.; because unknown to you, 40 nutritionists believe “we just don’t know yet”. And these 40 are provided no incentives to say so.
Take the Russia-Kiev question on Metaculus which had a large number of participants. It hovered at 8% for a long time. If prediction markets are to be useful beyond just pure speculation, that market didn’t tell me how many knowledgable people thought an opinion was simply not possible.
The ontological skepticism signal is missing—people saying there is no right or wrong that “exists”—we just don’t know. So be skeptical of what this market says.
As for KBC—most markets allow you to change/sell your bet before the event happens; especially for longer-term events. So my guess is that this is already happening. In fact, the uncertainty index would seperate out much of the “What do other people think?” element into it’s own question.
For locked in markets like ACX where the suggestion is to leave your prediction blank if you don’t know, imagine every question being paired with “What percentage of people will leave this prediction blank?”