Executive summary: Higher-order forecasts, which are forecasts about lower-order forecasts, could improve the efficiency and information aggregation of prediction markets and forecasting systems, analogous to the role of derivatives in financial markets.
Key points:
Higher-order forecasts are defined as forecasts about lower-order forecasts (e.g., 2nd-order forecasts predict 1st-order forecasts).
Potential benefits include identifying overconfidence, prioritizing important questions, surfacing relationships between events, enabling faster information aggregation, and leveraging existing prediction platform infrastructure.
Challenges include the dependence on accuracy of lower-order forecasts, added complexity, and the need for a substantial base of lower-order forecasting questions.
Alternative names considered include “derivatives,” “meta-forecasts,” and “higher-layer forecasts.”
The author expects higher-order forecasts to become a key component of mature forecasting systems over time, potentially leading to substantial accuracy and liquidity gains.
This comment was auto-generated by the EA Forum Team. Feel free to point out issues with this summary by replying to the comment, andcontact us if you have feedback.
Executive summary: Higher-order forecasts, which are forecasts about lower-order forecasts, could improve the efficiency and information aggregation of prediction markets and forecasting systems, analogous to the role of derivatives in financial markets.
Key points:
Higher-order forecasts are defined as forecasts about lower-order forecasts (e.g., 2nd-order forecasts predict 1st-order forecasts).
Potential benefits include identifying overconfidence, prioritizing important questions, surfacing relationships between events, enabling faster information aggregation, and leveraging existing prediction platform infrastructure.
Challenges include the dependence on accuracy of lower-order forecasts, added complexity, and the need for a substantial base of lower-order forecasting questions.
Alternative names considered include “derivatives,” “meta-forecasts,” and “higher-layer forecasts.”
The author expects higher-order forecasts to become a key component of mature forecasting systems over time, potentially leading to substantial accuracy and liquidity gains.
This comment was auto-generated by the EA Forum Team. Feel free to point out issues with this summary by replying to the comment, and contact us if you have feedback.