I don’t see how the “Will AI wipe out humanity before 2030” market could be valid. That is, I don’t see how it can even represent the average belief that traders have accurately, not just that the question itself seems extreme to me personally.
If “yes” can’t make money in either outcome, the market does not reflect probabilities faithfully.
It’s true that markets involving existential risk aren’t nearly as reliable as other markets. Perhaps I should have shown more care when using one as an example.
Ultimately for a market to be efficient, users have to be incentivised to trade to the best of their ability. Whilst the AI risk markets aren’t going to be particularly accurate, I do think that the one I linked is reasonably representative of our user’s beliefs. There is a good amount of upward and downward buying pressure on either side. My main concern with its accuracy is how many Yes shares Catnee has, however, the market does seem fairly stable at 25% and isn’t being held there with huge limit orders or anything like that.
One of the advantages of play money is that the incentive for truth-seeking can actually outweigh the desire to profit. This sort of market would obviously never work if real money was on the line!
I don’t see how the “Will AI wipe out humanity before 2030” market could be valid. That is, I don’t see how it can even represent the average belief that traders have accurately, not just that the question itself seems extreme to me personally.
If “yes” can’t make money in either outcome, the market does not reflect probabilities faithfully.
It’s true that markets involving existential risk aren’t nearly as reliable as other markets. Perhaps I should have shown more care when using one as an example.
Ultimately for a market to be efficient, users have to be incentivised to trade to the best of their ability. Whilst the AI risk markets aren’t going to be particularly accurate, I do think that the one I linked is reasonably representative of our user’s beliefs. There is a good amount of upward and downward buying pressure on either side. My main concern with its accuracy is how many Yes shares Catnee has, however, the market does seem fairly stable at 25% and isn’t being held there with huge limit orders or anything like that.
One of the advantages of play money is that the incentive for truth-seeking can actually outweigh the desire to profit. This sort of market would obviously never work if real money was on the line!