They might make the bet, but they’ll refuse to accept the result and won’t pay up. For example, what bet could you make with someone claiming that the World Trade Center towers were brought down by a controlled demolition?
There’s also the opposite problem. Suppose that a prediction market has assigned greater than zero probability to “In the year 3000, 2 + 2 = 5.” This will not happen, but you won’t make any money betting against it because you can’t adjudicate it until after your death...
For example, what bet could you make with someone claiming that the World Trade Center towers were brought down by a controlled demolition?
That’s not a prediction.
And refusing to pay up is a very old problem with a variety of solutions.
Suppose that a prediction market has assigned greater than zero probability to “In the year 3000, 2 + 2 = 5.” This will not happen, but you won’t make any money betting against it
I don’t see how this is a problem.
In general, the usual sane standards of proper betting apply: be clear what you’re betting on, be very specific about which criteria have to be satisfied for a bet’s outcome to be decided in a particular way, try to precommit everyone to payment, etc.
Exactly… the original post was about applying prediction market techniques and other opinion aggregation methods to other types of problems. I was saying that a prediction market is only as good as its eventual adjudication method—we already know, for example, that the Shroud of Turin was radiocarbon dated to long after the death of Jesus, but believers keep coming up with excuses not to change their minds anyway.
The techniques described in the post could be used in isolation; only the last was about non-forecast estimates. I agree that these are much, much tougher than ones with definitive answers. They may need pretty strict filtering of participants, and would be the least accepted.
Will people who don’t believe the results be willing to accept bets? Or, say, commit capital to liquid markets? :-D
They might make the bet, but they’ll refuse to accept the result and won’t pay up. For example, what bet could you make with someone claiming that the World Trade Center towers were brought down by a controlled demolition?
There’s also the opposite problem. Suppose that a prediction market has assigned greater than zero probability to “In the year 3000, 2 + 2 = 5.” This will not happen, but you won’t make any money betting against it because you can’t adjudicate it until after your death...
That’s not a prediction.
And refusing to pay up is a very old problem with a variety of solutions.
I don’t see how this is a problem.
In general, the usual sane standards of proper betting apply: be clear what you’re betting on, be very specific about which criteria have to be satisfied for a bet’s outcome to be decided in a particular way, try to precommit everyone to payment, etc.
Exactly… the original post was about applying prediction market techniques and other opinion aggregation methods to other types of problems. I was saying that a prediction market is only as good as its eventual adjudication method—we already know, for example, that the Shroud of Turin was radiocarbon dated to long after the death of Jesus, but believers keep coming up with excuses not to change their minds anyway.
The techniques described in the post could be used in isolation; only the last was about non-forecast estimates. I agree that these are much, much tougher than ones with definitive answers. They may need pretty strict filtering of participants, and would be the least accepted.