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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.
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This is a place to discuss relevant topics that have not appeared in recent posts. (Used to do this monthly; let’s see if worth reviving.)
Open Thread
Oh I think you're right! I mean, the inertia Gelman and Rotschild talk about in that article has in fact been observed in all kinds of markets -- e.g. a study of the Brazilian stock market found out it takes up to 50 minutes so that prices fully incorporate new information. That inertia is due not only to the default perception that the market got it right already, but also to the fact that the research needed to correct prices is costly. Hypermind is dramatically more illiquid than a stock market, so it should take not minutes but days, perhaps weeks (!). So, as I said, one *should* use information on recent mistakes to revise their confidence in the precision of prediction markets. Still, their track record remains impressive.
Supporting the opposite conclusion: that the probabilities do not justify the recent errors (also supporting my observation about the Trump market not varying properly with new information):
http://www.slate.com/articl...