Good post, it’s underappreciated that a society of ideally rational people wouldn’t have unsubsidized, real-money prediction markets.
unless you’ve actually got other people being wrong even in light of the new actors’ information
Of course in real prediction markets this is exactly what we see. Maybe you could think of PMs as they exist not as something that would exist in an equilibrium of ideally rational agents, but as a method of moving our society closer to such an equilibrium, subsidized by the bets of systematically irrational people. It’s not a perfect such method, but does have the advantage of simplicity. How many of these issues could be solved by subsidizing markets?
Good post, it’s underappreciated that a society of ideally rational people wouldn’t have unsubsidized, real-money prediction markets.
Of course in real prediction markets this is exactly what we see. Maybe you could think of PMs as they exist not as something that would exist in an equilibrium of ideally rational agents, but as a method of moving our society closer to such an equilibrium, subsidized by the bets of systematically irrational people. It’s not a perfect such method, but does have the advantage of simplicity. How many of these issues could be solved by subsidizing markets?
What discord is this, sounds cool.