Some quick points: 1. I largely agree about being skeptical about conventional prediction markets, compared to their hard-core enthusiasts. I came to similar conclusions a few years back, in part because I noticed that prediction markets were legal in the UK but no one used them. 2. The main value (that we care about) of prediction-markets ultimately is an externality. I’m not very optimistic about subsidies for them. 3. Obviously, prediction tournaments like Metaculus / Good Judgement Project, are not prediction markets, as described here. 4. All that said, I think that formal prediction markets do clearly produce some value and can fill a useful niche. For example, they could allow for hedging in areas that provide useful information to the public. In some of these cases, to the public, this is could be a literal epistemicfree lunch. Sure, it’s not all the epistemic information you might ever want, but it is something. This is equivalent to the fact that the stock market provides a lot of great information to the public, for free, but that the information is limited+specific.
Happy to see this discussion moving forward.
Some quick points:
1. I largely agree about being skeptical about conventional prediction markets, compared to their hard-core enthusiasts. I came to similar conclusions a few years back, in part because I noticed that prediction markets were legal in the UK but no one used them.
2. The main value (that we care about) of prediction-markets ultimately is an externality. I’m not very optimistic about subsidies for them.
3. Obviously, prediction tournaments like Metaculus / Good Judgement Project, are not prediction markets, as described here.
4. All that said, I think that formal prediction markets do clearly produce some value and can fill a useful niche. For example, they could allow for hedging in areas that provide useful information to the public. In some of these cases, to the public, this is could be a literal epistemic free lunch. Sure, it’s not all the epistemic information you might ever want, but it is something. This is equivalent to the fact that the stock market provides a lot of great information to the public, for free, but that the information is limited+specific.