4 ms·

It's a big idea of Overcoming Bias'[1] Robin Hanson[2] along with a proposed governing method based on it called the futarchy[3]. [1] http://www.overcomingbias

It's a big idea of Overcoming Bias'[1] Robin Hanson[2] along with a proposed governing method based on it called the futarchy[3]. [1] http://www.overcomingbias.com/tag/prediction-markets http://www.overcomingbias.com/tag/prediction-markets (easily one of top 5 blogs on the Internet) [2] http://hanson.gmu.edu/ideafutures.html http://hanson.gmu.edu/ideafutures.html [3] http://hanson.gmu.edu/futarchy.html http://hanson.gmu.edu/futarchy.html

pdonis 13y ago
There's a big difference between a prediction market and a decision market, which is what futarchy is. Mencius Moldbug expounded on this quite a while back in this post: http://unqualified-reservations.blogspot.com/2010/02/pipe-shorting-and-professor-hansons.html http://unqualified-reservations.blogspot.com/2010/02/pipe-sh... I won't go into much detail (the post is worth reading), but his basic point (which I agree with) is that the reason a prediction market works (when it works) is that the only incentive governing people's bets is their beliefs about the expected probabilities of outcomes. But this can only work if the bets people make are themselves statistically independent of the outcomes, and in a decision market they obviously can't be, since people's bets determine the outcome. (In the post Moldbug gives an actual real-world example of a market which gets manipulated in exactly this way.)