I think I should have asked more like ‘the current instantiation of prediction markets’.
I agree that prediction markets could be useful in principle, but I‘m not aware of any cases, in practice, where there’s tightly correlated multi-market action of the kind you describe in your first example painting a vivid and cohesive predictive picture.
I’m also not aware of cases where commentators have been successfully pressured to bet on their beliefs via prediction markets (I wouldn’t be surprised by a single example in this second case, but I would be surprised by a very high profile example involving a commentator well outside our sphere).
My suspicion is that, for prediction markets to pay off around big events, we may need to fix them (in ways other than increasing the liquidity/user count) ahead of time (I don’t have strong guesses for how to do this).
Remember Liberation Day? Trump’s Tariffs? The reaction of the stock market was crucial for determining how all that played out; things would have been much worse if not for the clear unambiguous signals being sent by the market about the expected future effect of various announcements. I count this as a win for prediction markets, because stock markets are basically a form of prediction market about the value of companies. Seems plausible to me that we can use prediction markets to bring the magic of stock markets to other domains, and that if we did that, it would be really good.
I think I should have asked more like ‘the current instantiation of prediction markets’.
I agree that prediction markets could be useful in principle, but I‘m not aware of any cases, in practice, where there’s tightly correlated multi-market action of the kind you describe in your first example painting a vivid and cohesive predictive picture.
I’m also not aware of cases where commentators have been successfully pressured to bet on their beliefs via prediction markets (I wouldn’t be surprised by a single example in this second case, but I would be surprised by a very high profile example involving a commentator well outside our sphere).
My suspicion is that, for prediction markets to pay off around big events, we may need to fix them (in ways other than increasing the liquidity/user count) ahead of time (I don’t have strong guesses for how to do this).
[sorry if any phrasing is awkward; I’m concussed]
I’m more optimistic than you I guess.
Remember Liberation Day? Trump’s Tariffs? The reaction of the stock market was crucial for determining how all that played out; things would have been much worse if not for the clear unambiguous signals being sent by the market about the expected future effect of various announcements. I count this as a win for prediction markets, because stock markets are basically a form of prediction market about the value of companies. Seems plausible to me that we can use prediction markets to bring the magic of stock markets to other domains, and that if we did that, it would be really good.