4 ms·

They make it up. But everyone assumes it means something because it's an average of a bunch of people making it up.

• falcor84 3y ago
  No need to assume, you can check the prediction history and see that they generally do quite well. You also look at the histories of individual predictors' profiles and see some with consistent successes.
  • ajkjk 3y ago
    Well what is interesting is not how well the aggregate does, but how much better it does than individuals. After all if individuals can predict stuff consistently then what does the prediction market add?
    • falcor84 3y ago
      My understanding is that the market, which rewards and punishes your predictions is what makes one a better predictor.
      • ajkjk 3y ago
        Right, but that doesn't do anything unless there's life-savings-amounts of money on the line such that anyone is incentivized to actually try. And even when people are incentivized, just look at the stock market for clear evidence that it doesn't work: a market doesn't magically make people good at things; people screw up and lose bets and go bankrupt all the time. Sure some of the decently-competent banks and hedge funds don't---but there is no reason to think there are any actors close to that sophisticated on a prediction market.
        • falcor84 3y ago
          You're of course that it's not yet as sophisticated as the stock exchange, but I wouldn't be as dismissive of the importance people attach to internet points.
          • ajkjk 3y ago
            The problem isn't that they don't place importance in them. It's that there is nothing weeding out failure. Financial incentives in principle (although definitely not very well in practice lol) punish failure in a resilient way: you actually can't keep betting if you can't win. Where... I don't think that's true for prediction markets? Anyway, I dunno. I also don't believe that people predict well even with incentives, and think the whole thing is a farce, so I'm just a pretty dogged skeptic.