tag:blogger.com,1999:blog-4039434.post4243446257084836635..comments2024-02-26T06:46:53.171-05:00Comments on Rajiv Sethi: On Prediction Markets and Self-Fulfilling PropheciesRajivhttp://www.blogger.com/profile/13667685126282705505noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4039434.post-149117391012258072012-11-30T06:31:40.385-05:002012-11-30T06:31:40.385-05:00My favorite answer is to disallow anonymous tradin...My favorite answer is to disallow anonymous trading. When every trade and every trader is public, manipulation becomes harder to hide. David Pennockhttps://www.blogger.com/profile/06369172924419106987noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-48092253244519417662012-11-30T06:31:22.932-05:002012-11-30T06:31:22.932-05:00My favorite answer is to disallow anonymous tradin...My favorite answer is to disallow anonymous trading. When every trade and every trader is public, manipulation becomes harder to hide. David Pennockhttps://www.blogger.com/profile/06369172924419106987noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-19920805729682492042010-01-01T18:28:44.470-05:002010-01-01T18:28:44.470-05:00Furthermore, pollsters and academics have reputati...Furthermore, pollsters and academics have reputations to protect, unlike (anonymous) traders. On the other hand, manipulators can face rapid and strong push back from other traders if they go too far. It's the balance of these two effects that will determine which system provides more accurate forecasts. My point is simply that the accuracy of prediction markets relative to other forecasting mechanisms will depend on whether we are dealing with exogenous or endogenous events, and (if the latter) whether or not the feedback between subjective beliefs and objective probabilities is positive or negative.Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-49756194999303088742010-01-01T17:49:18.191-05:002010-01-01T17:49:18.191-05:00True, but the anonymity of participation in predic...True, but the anonymity of participation in prediction markets means that we cannot control for "house effects" in interpreting the data. Most individuals discount partisan polls for this reason and they are often excluded from polling aggregates. We can't exclude partisan traders in the same way.Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-45444362820814270862010-01-01T17:26:35.556-05:002010-01-01T17:26:35.556-05:00The possibility of self-fulfilling or self-defeati...The possibility of self-fulfilling or self-defeating prophecies is an issue with <i>any</i> forecasting mechanism where forecasters have any incentives to offer more, vs. less, accurate forecasts. It is not a problem particular to prediction markets.Robin Hansonhttps://www.blogger.com/profile/18396528456436940972noreply@blogger.com