Overcoming Bias

Share this post

Me on Prediction Markets

www.overcomingbias.com

Discover more from Overcoming Bias

This is a blog on why we believe and do what we do, why we pretend otherwise, how we might do better, and what our descendants might do, if they don't all die.
Over 11,000 subscribers
Continue reading
Sign in

Me on Prediction Markets

Robin Hanson
Feb 4, 2022
Share this post

Me on Prediction Markets

www.overcomingbias.com
11
Share

Here’s a more-polished-than-usual video by me summarizing the idea of prediction market:

Share this post

Me on Prediction Markets

www.overcomingbias.com
11
Share
11 Comments
Share this discussion

Me on Prediction Markets

www.overcomingbias.com
RobinHanson
May 15

Hedging can be a motive for trade, and if the bet event is correlated with one of the few market "factors" that have risk premia, then the market probability for that event will weight high risk states differently. The prices can still be informative then however, and most claims don't correlate much with any of these factors.

Expand full comment
Reply
Share
Overcoming Bias Commenter
May 15

I'm confused about your point re betting prices. If the outcome of A is correlated with other valuable things e.g. stock market prices, then betting on A can act as a hedge, distorting the price away from the underlying probability.

Expand full comment
Reply
Share
9 more comments...
Top
New
Community

No posts

Ready for more?

© 2023 Robin Hanson
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing