Open Thread, May 5 - 11, 2014

Tenoke

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Previous Open Thread

You know the drill - If it's worth saying, but not worth its own post (even in Discussion), then it goes here.

Notes for future OT posters:

1. Please add the 'open_thread' tag.

2. Check if there is an active Open Thread before posting a new one.

3. Open Threads should start on Monday, and end on Sunday.

4. Open Threads should be posted in Discussion, and not Main.

However, the prediction markets that we have are currently only available in meatspace, they have very low volume, and the rules are not ideal

The global financial markets are basically prediction markets.

If you have a prediction (a "view") on something important, you can often express that view in financial markets.

tax on bullshit

Not with "play money", it won't.

If I wanted to know how likely it was that Republicans would win the next election, how could I go about estimating this from the financial markets?

49eB112y

This seems false to me. Suppose there is a probability of Russia using a nuclear weapon on Crimea. You have a view on this probability, and other market participants also have a view on this probability, but you don't know what their views are. In order to determine which way you need to invest in Ukrainian and Russian stocks/currencies/etc. to express your view, you have to become an absolute expert in any of the assets in question so that you can estimate the implied probability of current market prices. Since you don't have time to become an expert on every aspect of economics remotely tied to every view you have, you generally will not be able to express your views in the financial markets, unless your views all happen to revolve around the broad movements of asset prices. The number of assets we have to invest in is really quite limited (realistically, you can invest cheaply only in equities, bonds, currencies, commodity futures, and rate futures, and other things tied to these), and in many cases there are "important events" which can have ambiguous impacts on those assets. The US presidential election, which seems to be a favorite of prediction market enthusiasts, has only an ambiguous impact on US equity market prices, and yet many people consider it an important topic. It occurs to me that in particular, events related to and actions by governments will often be ambiguously reflected by private markets.

0Anders_H12y

This is true, but I was talking about the prediction markets that we have within the Less Wrong community. We may be interested in predictions other than those that go into financial markets. From what I understand, prediction markets are available at many rationalist houses and other places Less Wrong members gather. It would be great if we could link these together As for the "tax on bullshit", it wouldn't be a tax that is paid in money, but as long as your balance is publicly linked to your Less Wrong account, it would be a tax that is paid in credibility points. I concede that maybe I should have used a better word than "tax"

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Open Thread, May 5 - 11, 2014

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You know the drill - If it's worth saying, but not worth its own post (even in Discussion), then it goes here.

6

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Open Thread, May 5 - 11, 2014

6

You know the drill - If it's worth saying, but not worth its own post (even in Discussion), then it goes here.

6