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WillPearson comments on Open Thread #38 - Effective Altruism Forum

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Comment author: purplepeople 22 August 2017 07:47:05PM 0 points [-]

That's an interesting point about prediction markets. We individuals tend to invest in the stock market even when we know the market as a whole is wiser than us as individuals, because on the whole the market goes up, and anyways there are ways to track overall market performance. For prediction markets, I suppose there would need to be similar incentives somehow, otherwise every individual who doesn't have special information would be better off predicting what the overall market predicts, which doesn't help.

I'm guessing I just don't understand how prediction markets work. Hoping someone will correct me.