That seems pretty reasonable except I take issue with one thing:
“I don’t see what mechanism is supposed to make the market a reliable predictor of anything if not a reflection of the scientific understanding of the field with individual randomness mostly drowned out.
…
I’ve seen the same, but my own sense is that the reverse problem—economists having an astonishing lack of understanding of science—is much more acute.”
People generating these market prices are not principally economists. I don’t think economists have any particular wisdom about the natural sciences but that’s not what I’m relying on.
Often people with detailed knowledge of an industry who have a better shot at forecasting e.g. future oil output, are the ones trading. They take a great interest in what scientists and engineers say, if it’s credible, because it can help them make money. Where the prices traders generate are inconsistent with what an outspoken pessimist or optimist says, I downgrade its reliability because they haven’t yet managed to persuade people with money on the line.
An economist need know nothing at all about the details of US politics to know that establishing a liquid prediction market can get them good information about the likely outcome of an election.
By contrast a natural scientist who doesn’t know how businesses respond to resource scarcity is in deep trouble trying to forecast the likely outcome because they lack half the picture.
Now this is no guarantee, because prices often end up being misjudged. But it’s the best thing I can see to go on for the modal scenario.
Consistent with that, if resource prices and futures spike, I will upgrade this cause area a lot.
That seems pretty reasonable except I take issue with one thing:
“I don’t see what mechanism is supposed to make the market a reliable predictor of anything if not a reflection of the scientific understanding of the field with individual randomness mostly drowned out. … I’ve seen the same, but my own sense is that the reverse problem—economists having an astonishing lack of understanding of science—is much more acute.”
People generating these market prices are not principally economists. I don’t think economists have any particular wisdom about the natural sciences but that’s not what I’m relying on.
Often people with detailed knowledge of an industry who have a better shot at forecasting e.g. future oil output, are the ones trading. They take a great interest in what scientists and engineers say, if it’s credible, because it can help them make money. Where the prices traders generate are inconsistent with what an outspoken pessimist or optimist says, I downgrade its reliability because they haven’t yet managed to persuade people with money on the line.
An economist need know nothing at all about the details of US politics to know that establishing a liquid prediction market can get them good information about the likely outcome of an election.
By contrast a natural scientist who doesn’t know how businesses respond to resource scarcity is in deep trouble trying to forecast the likely outcome because they lack half the picture.
Now this is no guarantee, because prices often end up being misjudged. But it’s the best thing I can see to go on for the modal scenario.
Consistent with that, if resource prices and futures spike, I will upgrade this cause area a lot.