Treat Info Institutions Alike

“Info institutions” solicit contributions, aggregate them into info summaries, and distribute such summaries to audiences. Examples include gossip, courts, journalism, academia, social media, speculative markets, and official reports of orgs (such as govts and churches). Such institutions often dis their competitors. For example, most have long dissed gossip, the oldest. Early journalists were disused by governments and churches. Recently, academics and journalists have dissed social media.

Lately, journalists have been dissing prediction markets, with complaints that can be made about most info institutions. For example:

• Prestige - Its bad if people get info they enjoy, vs what prestigious folks say is good for them.

• Waste - People might enjoy it so much they waste time and money on it.

• Money - This involves money, which could change incentives.

• Privacy - Sometimes it is bad to spread more info. For example, info on candidate chances on election day.

• Secrets - People who had promised to keep secrets might be induced instead to reveal them.

• Sabotage - Participants might push changes to the world to make their takes more accurate.

On these complaints I say: treat the various info institutions alike. For example, if you want to ban govt officials from trading in prediction markets, for fear they’d reveal secrets, then also ban them from talking to reporters, or from gossiping. If you want to ban sports betting due to possible waste, then ban sports news and entertainment too. If you want to promote democracy by protecting political speech in gossip, journalism, and social media, then protect political prediction markets also.

For some kinds of complaints, we have good evidence that prediction markets are in fact superior to other info institutions:

• Errors - In particular cases, predictions have been wrong.

• Vagueness - In particular cases, it was unclear to some what exactly was being claimed.

• Manipulation - Folks might offer biased contributions to distort audience actions.

Prediction markets have been consistently more accurate than other sources on the same topics at same time with similar resources. And an expectation of manipulation attempts on average makes such markets more accurate. If these issues are important, we should be willing to tolerate doing worse on other problems, to do better on these.