Creating markets for accountability
Austin from https://manifold.markets here -- great post! At Manifold, one of our goals is to be "Twitter for prediction markets" - hence our emphasis on user-created markets, allowing anyone to set up a market for their hot take.
(aside: I don't know that "trilemma" is exactly the right word here; there's no fundamental reason that a PM platform couldn't have all three of user-created, easy-to-use, and real-money. We're currently working on several initiatives to make our fake currency more like real money, such as allowing withdraws to charities, and hosting cash-prize tournaments.)
I share your puzzlement at the observation that intellectual support for PMs far outweighs their real-world usage. Here are a few other explanations that I like:
- For the corporate use case: any single market conveys very few bits of information (just a probability from 0 to 1). This is good for letting two sides know what they disagree on, but bad for searching through the total space of ideas. E.g., at the point when I ask a question "If we implement dark mode for our site, will our DAU increase by 15% in the week afterwards?" I've already done a ton of work to narrow down the space of all possible features to ask, and all possible metrics to track. Getting a more accurate probability estimate of that question is only like 5-10% of the whole value of the question.
(Incidentally: we're trying to solve this problem with our Free Response markets! This lets someone pose a question "What features will be valuable for Manifold" and users to respond and vote on suggestions StackOverflow-style, except their votes are bets.)
See also: https://forum.effectivealtruism.org/posts/dQhjwHA7LhfE8YpYF/prediction-markets-in-the-corporate-setting
- For operationalizing Twitter disagreements: it's actually quite difficult and time-intensive to arrive at a single statement that two different sides are comfortable betting on! I believe this is called a "crux" by LessWrong folks. For example, on this public disagreement https://www.lesswrong.com/posts/sWLLdG6DWJEy3CH7n/imo-challenge-bet-with-eliezer, Eliezer and Paul apparently spent a while to arrive on a concrete disagreement here over their differing intuitions of how the AI scenario will play out, discarding a few other candidate proposals throughout the way.
Finally: I'm always happy to chat more in-depth on anything prediction-market related; reach out at email@example.com!
Does it make more economic sense if you replace "prediction market" with "Netflix search" and "pundit" with "recommendations Algo" ?
I think some of the drawbacks of prediction markets go away if you assume they are people-operated but the forecasters are all bots.