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I’m new to this concept. Can someone help explain how prediction markets are used for good? Given that this is a zero sum game, isn’t this just facilitating th

I’m new to this concept. Can someone help explain how prediction markets are used for good? Given that this is a zero sum game, isn’t this just facilitating the transfer of money between the winner and the loser.

adam 8y ago
In the public context, people often cite the consensus predictions to get a better understanding of what people _think_ will happen vs. what they _want_ to happen. In a corporate context, prediction markets are often used internally amongst employees to predict things like sales forecasts, ability to hit milestones, budgets, quantify risks, and predict the outcome of strategic initiatives. In both contexts, people tend to participate anonymously so they have the freedom to express what they actually think. Contrast this, especially inside a company, with the politics of saying what you actually think. That "reality based" discourse is unheard of, especially in larger organizations. Prediction markets are often the only venue someone can express themselves in a productive way.
savanaly 8y ago
I think it's that everyone can see the odds of something happened that are indicated by the bettors in the market, and that's valuable information that can be considered the absolute best prediction that can be made based on available evidence. I was watching the betting markets on the night of the 2016 presidential election. As I seem to recall, at the start of the night when people were still basically confident Hillary would win, I was watching electionbettingodds.com and it showed a ~30% chance of a Trump win, so I wasn't so sure. And of course it moved smoothly to nearly 100% as more information emerged and was incorporated into the markets. A good example of how betting markets are obviously not omniscient (or else they would have had 100% for trump), but a lot better than listening to your friends or even the top pundits.

adam 8y ago

In the public context, people often cite the consensus predictions to get a better understanding of what people _think_ will happen vs. what they _want_ to happen. In a corporate context, prediction markets are often used internally amongst employees to predict things like sales forecasts, ability to hit milestones, budgets, quantify risks, and predict the outcome of strategic initiatives. In both contexts, people tend to participate anonymously so they have the freedom to express what they actually think. Contrast this, especially inside a company, with the politics of saying what you actually think. That "reality based" discourse is unheard of, especially in larger organizations. Prediction markets are often the only venue someone can express themselves in a productive way.

savanaly 8y ago

I think it's that everyone can see the odds of something happened that are indicated by the bettors in the market, and that's valuable information that can be considered the absolute best prediction that can be made based on available evidence. I was watching the betting markets on the night of the 2016 presidential election. As I seem to recall, at the start of the night when people were still basically confident Hillary would win, I was watching electionbettingodds.com and it showed a ~30% chance of a Trump win, so I wasn't so sure. And of course it moved smoothly to nearly 100% as more information emerged and was incorporated into the markets. A good example of how betting markets are obviously not omniscient (or else they would have had 100% for trump), but a lot better than listening to your friends or even the top pundits.