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Overcoming Bias Commenter's avatar

Wiki already made my point:  The WMD case reminds us that the answer generated by aprediction market may depend on the amount of the subsidy.  If the people with the best information alsohave a very high cost of supplying that information, the subsidy required toget a good prediction will be very high; a market with a lower subsidy, though it seems to be functioning properly, will actually produce poor predictions.  And it may be difficult to determine howlarge a subsidy is needed to produce predictions of the desired quality.

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RobinHanson's avatar

There were subsidies to get the wrong answer in other forums, but not in the prediction markets. In prediction markets, the existence of manipulators willing to lose money to create a mistaken impression *is* a subsidy to other traders.

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