A betting market is a mechanism for attaching a cost to inaccuracy, as well as a reward for accuracy. However, it also disincentivizes information-sharing, because your winnings depend on being more accurate than your competitors.
While we like the feature of disincentivizing inaccuracy, the way prediction markets incentivize withholding information is a downside. It means that there really is a difference between searching for points of disagreement and aiming for convergence. You’re looking for alpha.
Maybe a tweak of the wording is in order. In a collaborative debate, with full information sharing, we’re aiming for convergence in that we respect each others’ judgment and would find it a problem if we felt persuaded by an argument that didn’t persuade our partner. However, we are not forcing convergence, not trying to create a perception of agreement and move on for its own sake.
A betting market is a mechanism for attaching a cost to inaccuracy, as well as a reward for accuracy. However, it also disincentivizes information-sharing, because your winnings depend on being more accurate than your competitors.
While we like the feature of disincentivizing inaccuracy, the way prediction markets incentivize withholding information is a downside. It means that there really is a difference between searching for points of disagreement and aiming for convergence. You’re looking for alpha.
Maybe a tweak of the wording is in order. In a collaborative debate, with full information sharing, we’re aiming for convergence in that we respect each others’ judgment and would find it a problem if we felt persuaded by an argument that didn’t persuade our partner. However, we are not forcing convergence, not trying to create a perception of agreement and move on for its own sake.