Amazing post. But I am stuck at the "prediction market does not reflect probability" point. Currently Trump futures sell for 0.36$ and Metaculus predicts a 22% winning chance of Trump winning in 2024. This difference is what one would observe if many people are used these futures contracts for hedging. However, couldn't I just issue lots of futures contracts to bring the price down? Assuming that my assets are not meaningfully linked to Trump winning, that means 0.36$-0.22$=0.12$ expected return per issued contract.
I have read several textbooks on game theory (there are quite a lot of books out there). I found all of them okay but none outstanding. What I did find very useful was the YouTube-Playlist Game Theory 101 by William Spaniel. He also has published a book with the same title on amazon.
Subject: Econometrics
Recommendation: Mastering 'Metrics by Josh Angrist and J.S. Pischke
Reason: The book uniquely explains the intuitive ideas behind econometric methods. There is also a video series by MRU on the book. Other books that I have read on the subject:
- Mostly Harmless Econometrics, by the same authors. Kind of an earlier version of Mastering Metrics, more in depth, less fun and engaging.
- Introductory Econometrics A Modern Approach, by Wooldridge. Excellent for hands-on projects, very detailed, not as intuitive and easy to read as the others, ...
Macroeconomics: Olivier Blanchards Macroeconomics is a concise, yet in-depth tour of standard macroeconomic theory. I recommend it as a starting point for studying topics such as monetary policy and international trade.