Open Thread: July 2009

Here's our place to discuss Less Wrong topics that have not appeared in recent posts. Have fun building smaller brains inside of your brains (or not, as you please).

Are there differences between prediction and markets that make it easier for a "smart bias-educated person" to win fairly easily?

If you think its fairly easy, then I'd be curious to know whether you're putting your money where your mouth is... how much have you invested?

Are there differences between prediction and markets that make it easier for a "smart bias-educated person" to win fairly easily?

Efficiency.

3gwern17y

Besides what Nick said, people seem to treat prediction markets more as entertainment than seriously. For example, Ron Paul or Al Gore should never have broken 1%, and Hillary shares were high long after it became obvious she wasn't going to make the nomination. These were all pretty clear to anyone suspicious of fanciful wouldn't-it-be-fun? scenarios and being biased towards what one would like to happen. [...] I started in the IEM with ~$20, and even after taking some heavy losses in 2004 and whatever fee the IEM charged ($5?), I still cashed out $38 in 2008. If you're interested in more details, see my http://www.gwern.net/Prediction%20markets

2Nick_Tarleton17y

Yes. Prediction markets are far smaller, and have far less intelligence devoted to exploiting away their irrationalities.