Unless you can explain to me how prediction markets are going to break the pattern that two different shares of the same stock have correlated prices.
I’m actually not sure how prediction markets are supposed to have an effect on this issue. My issue is not that people have too much difficulty recognizing patterns. My issue is that some patterns once recognized do not provide incentives to make that pattern disappear. Unless you can tell me how prediction markets might fix this problem, your response seems like a bit of a non-sequitur.
I feel like your discussion of predictors makes a few not-necessarily-warranted assumptions about how the predictor deals with self-reference. Then again, I guess anything that doesn’t do this fails as a predictor in a wide range of useful cases. It predicts a massive fire will kill 100 people, and so naturally this prediction is used to invalidate the original prediction.
But there is a simple-ish fix. What if you simply ask it to make predictions about what would happen if it (and say all similar predictors) suddenly stopped functioning immediately before this prediction was returned?