Prediction markets can tell the future. Why is the US so afraid of them?
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Re: Prediction markets can tell the future. Why is the US so afraid of them?
#2Prediction markets and bookmakers really strongly expected a Clinton win in 2016. Irish bookies were so sure Trump would lose that one firm began paying out to those who bet Clinton even before the election.
And we all know how that turned out.
Nov. 7, 2016:
"Hillary Clinton’s odds of winning the presidency rose from 78% last week to 91% Monday before Election Day, according to CNN’s Political Prediction Market."
https://www.cnn.com/2016/11/07/politics/political-prediction...
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#3Looks like an interesting article but behind a paywall
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#4Prediction markets and bookmakers really strongly expected a Clinton win in 2016. Irish bookies were so sure Trump would lose that one firm began paying out to those who bet Clinton even before the election. And we all know how that turned out. Nov. 7, 2016: "Hillary Clinton’s odds of winning the presidency rose from 78% last week to 91% Monday before Election Day, according to CNN’s Political Prediction Market." htt…
You can go look at the old Predictit market if you like - it's still around[1]. You can also check election betting odds[2]. Clinton hovered around 60-80 in the week or two before the election.
Even if it were 90%, I'm not sure that's an indictment of prediction markets. A probability of 90% means that 10% of the time, the other thing happens. It's a bit like saying "wow, it's cold today; I guess global warming isn't real." You'd want to to an analysis across many many prediction markets in order to see if they're generally accurate. That already exists, it's here if you'd like to look at it[3].
[1]: https://www.predictit.org/markets/detail/1234/Who-will-win-t...
[2]: https://electionbettingodds.com/WIN_chart_maxim_lott_john_st...
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#5If prediction markets could tell the future one would imagine the first person to harness them would now be the most wealthy and powerful person to have ever lived.
So, you know, DOUBT.
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#6Looks like an interesting article but behind a paywall
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#7The problem with predictions markets is that they incentivize participants to distort the market in order to make their prediction come true (and thus receive a payout). It quickly stops being a place to gauge the likelihood of an event, and turns into a roundabout contract bidding mechanism, the most famous example being "the likelihood that so-and-so famous politician will be dead by next year" is just an anonymized assassination contract. There's a reason that insider trading is illegal; prediction markets are inordinately susceptible to Goodhart's Law.
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#8Looks like an interesting article but behind a paywall
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Re: Prediction markets can tell the future. Why is the US so afraid of them?
#9The problem with predictions markets is that they incentivize participants to distort the market in order to make their prediction come true (and thus receive a payout). It quickly stops being a place to gauge the likelihood of an event, and turns into a roundabout contract bidding mechanism, the most famous example being "the likelihood that so-and-so famous politician will be dead by next year" is just an anonymize…
In theory the same thing is true with horse race betting; you can just assassinate the horse. Or the jockey. Or if you want to be more subtle about it, just slip something into the horse feed. But this doesn't really happen in practice.
Re: Prediction markets can tell the future. Why is the US so afraid of them?
#10The problem with predictions markets is that they incentivize participants to distort the market in order to make their prediction come true (and thus receive a payout). It quickly stops being a place to gauge the likelihood of an event, and turns into a roundabout contract bidding mechanism, the most famous example being "the likelihood that so-and-so famous politician will be dead by next year" is just an anonymize…
In theory the same thing is true with horse race betting; you can just assassinate the horse. Or the jockey. Or if you want to be more subtle about it, just slip something into the horse feed. But this doesn't really happen in practice.
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