It’s not zero net value because there’s information produced, and also it’s fun. A more rational alien species that does not find risk enjoyable would have less accurate prediction markets (although without such thing as “gambling” maybe their markets are actually legal and thus more accurate.)
At manifold we haven’t really found a good way to use the information value yet.
Subsidization doesn’t lead to increased activity in practice unless it makes the market among the top best trading opportunities. Pay for views has been much more effective as a “pay for information” method than subsidy.
Most users are bettors rather than viewers. It’s good that we’re good at converting people, but without a long tail of lurkers we aren’t generating a lot of value from the information itself.
Cool to hear from someone at manifold about this! I agree the information and enjoyment value can make it worthwhile (and even pro-social), but if it’s zero net monetary value, that surely limits their reach. I appreciate prediction markets from a perspective of “you know all that energy going into determining stock prices? That could be put towards something more useful!”, but I worry they won’t live up to that without a constant flow of money.
Subsidization doesn’t lead to increased activity in practice unless it makes the market among the top best trading opportunities.
That’s really interesting! Is there a theory for why this happens? Maybe traders aren’t fully rational in which markets they pursue, or small subsidies move markets to “not worth it” from “very not worth it”?
Well, you can monetize info value in various ways—sell advertisements, subscriptions to get more data, access to superforecasters, directly sell “accuracy” (pay to increase trading volume) - if it is actually valuable. Alternatively, EA would probably continue to fund manifold if they find it valuable (like for pushing back AI timelines), but i still much prefer “valuable enough for people to pay for” as an objective target to hit.
I think fun mostly causes traders to accept higher losses than they would otherwise.
I don’t think it’s surprising that people don’t bet on profitable markets unless they actually know the market exists and they know there’s alpha in it. The whole purpose of marketing is to match users with deals they find valuable. And yet, do you think you have purchased every consumer good that would improve your life?
It’s not zero net value because there’s information produced, and also it’s fun. A more rational alien species that does not find risk enjoyable would have less accurate prediction markets (although without such thing as “gambling” maybe their markets are actually legal and thus more accurate.)
At manifold we haven’t really found a good way to use the information value yet. Subsidization doesn’t lead to increased activity in practice unless it makes the market among the top best trading opportunities. Pay for views has been much more effective as a “pay for information” method than subsidy. Most users are bettors rather than viewers. It’s good that we’re good at converting people, but without a long tail of lurkers we aren’t generating a lot of value from the information itself.
Cool to hear from someone at manifold about this! I agree the information and enjoyment value can make it worthwhile (and even pro-social), but if it’s zero net monetary value, that surely limits their reach. I appreciate prediction markets from a perspective of “you know all that energy going into determining stock prices? That could be put towards something more useful!”, but I worry they won’t live up to that without a constant flow of money.
That’s really interesting! Is there a theory for why this happens? Maybe traders aren’t fully rational in which markets they pursue, or small subsidies move markets to “not worth it” from “very not worth it”?
Well, you can monetize info value in various ways—sell advertisements, subscriptions to get more data, access to superforecasters, directly sell “accuracy” (pay to increase trading volume) - if it is actually valuable. Alternatively, EA would probably continue to fund manifold if they find it valuable (like for pushing back AI timelines), but i still much prefer “valuable enough for people to pay for” as an objective target to hit.
I think fun mostly causes traders to accept higher losses than they would otherwise.
I don’t think it’s surprising that people don’t bet on profitable markets unless they actually know the market exists and they know there’s alpha in it. The whole purpose of marketing is to match users with deals they find valuable. And yet, do you think you have purchased every consumer good that would improve your life?