As Zian says: large/liquid/free prediction markets aren’t sufficient, they also need to be trusted by enough people, or by powerful enough people. IMO there will be at least a 7 year lag between prediction markets working well, and them being broadly accepted outside of narrow wonk/nerd circles.
In the existing world, covid was already front-page news in Jan/Feb 2020, with speculation about it spreading beyond China*. Few people in the West did anything. The limiting factor wasn’t warnings being issued, it was people being able to grok that something Really Bad was coming, and prepare rather than burying heads in the sand.
Suppose the headlines said “prediction markets expect covid to reach us” rather than “experts expect covid to reach us”. Who would have behaved differently? The kind of people and institutions which tend to react to signals from stock markets and opinion polls—the competent minority.
Plus, even a good prediction market would not have immediately reached certainty that covid would become a pandemic. I imagine the alarm and confidence gradually increasing over early 2020
Overall, we might have shifted the reactions forward by a couple of weeks. In a really good scenario that might have led to enough pressure to make governments do something (e.g. widespread testing before it was too late). But...even that might have been enough to stop the pandemic in the spring.
(*) incidentally, I’m struggling to check my memory on that. Tips for how to not just confirm there was reporting on covid, but get a sense of how prominent it was?
In the existing world, covid was already front-page news in Jan/Feb 2020, with speculation about it spreading beyond China*. Few people in the West did anything.
The stock market is essentially a prediction market so a seperate prediction market on the question whether COVID-19 reaches us wouldn’t necessarily produced more information.
I have to question the premises and the strength of the conclusion here.
Suppose the headlines said “prediction markets expect covid to reach us” rather than “experts expect covid to reach us”. Who would have behaved differently? The kind of people and institutions which tend to react to signals from stock markets and opinion polls—the competent minority.
This comparison feels off—I remember things being much more controversial and confusing than “experts expect covid to reach us”. But to answer the second part, I guess I would have to ask myself how many public health officials, supply chain influencers, lawmakers, etc. were in the competent minority (and how money-motivated they were).
even a good prediction market would not have immediately reached certainty that covid would become a pandemic.
But certainty is never necessary for action. I intuitively imagine a major difference between the sort of uncertainty I felt in Feb 2020 (due to model uncertainty, low trust, competing heuristics, Twitter fog) vs. the uncertainty I would have if prediction markets had said “X% chance of pandemic spread within 3 months”. As a human, these different types of uncertainty affect my behavior differently. I was able to replace some of the former uncertainty with the latter uncertainty by watching metaculus, but being able to freely hedge my bets would have been even better.
Overall, we might have shifted the reactions forward by a couple of weeks[...]even that might have been enough to stop the pandemic in the spring.
Right, a 14-day shift can make a lot of difference in the early stages of exponential growth. (Or did you mean to say “not enough”?)
I think there may be a decent case for prediction markets having only minor overall impact during the notional 7-year lag, but not a strong case.
And even if prediction markets wouldn’t have prevented any of the largest mistakes...it would be nice to get money for being correct. Or to be able to easily hedge between monetary risk (losing bets), health risks (virus), and professional risks (refusing to go to work in person).
…And to be honest it would have been real nice to ask Vox writers to put their money where their mouth was.
As Zian says: large/liquid/free prediction markets aren’t sufficient, they also need to be trusted by enough people, or by powerful enough people. IMO there will be at least a 7 year lag between prediction markets working well, and them being broadly accepted outside of narrow wonk/nerd circles.
In the existing world, covid was already front-page news in Jan/Feb 2020, with speculation about it spreading beyond China*. Few people in the West did anything. The limiting factor wasn’t warnings being issued, it was people being able to grok that something Really Bad was coming, and prepare rather than burying heads in the sand.
Suppose the headlines said “prediction markets expect covid to reach us” rather than “experts expect covid to reach us”. Who would have behaved differently? The kind of people and institutions which tend to react to signals from stock markets and opinion polls—the competent minority.
Plus, even a good prediction market would not have immediately reached certainty that covid would become a pandemic. I imagine the alarm and confidence gradually increasing over early 2020
Overall, we might have shifted the reactions forward by a couple of weeks. In a really good scenario that might have led to enough pressure to make governments do something (e.g. widespread testing before it was too late). But...even that might have been enough to stop the pandemic in the spring.
(*) incidentally, I’m struggling to check my memory on that. Tips for how to not just confirm there was reporting on covid, but get a sense of how prominent it was?
The stock market is essentially a prediction market so a seperate prediction market on the question whether COVID-19 reaches us wouldn’t necessarily produced more information.
I have to question the premises and the strength of the conclusion here.
This comparison feels off—I remember things being much more controversial and confusing than “experts expect covid to reach us”. But to answer the second part, I guess I would have to ask myself how many public health officials, supply chain influencers, lawmakers, etc. were in the competent minority (and how money-motivated they were).
But certainty is never necessary for action. I intuitively imagine a major difference between the sort of uncertainty I felt in Feb 2020 (due to model uncertainty, low trust, competing heuristics, Twitter fog) vs. the uncertainty I would have if prediction markets had said “X% chance of pandemic spread within 3 months”. As a human, these different types of uncertainty affect my behavior differently. I was able to replace some of the former uncertainty with the latter uncertainty by watching metaculus, but being able to freely hedge my bets would have been even better.
Right, a 14-day shift can make a lot of difference in the early stages of exponential growth. (Or did you mean to say “not enough”?)
I think there may be a decent case for prediction markets having only minor overall impact during the notional 7-year lag, but not a strong case.
And even if prediction markets wouldn’t have prevented any of the largest mistakes...it would be nice to get money for being correct. Or to be able to easily hedge between monetary risk (losing bets), health risks (virus), and professional risks (refusing to go to work in person). …And to be honest it would have been real nice to ask Vox writers to put their money where their mouth was.