On Mon, Nov 5, 2012 at 12:52 PM, Steve Smith <[email protected]> wrote:
> I'm curious what this group thinks about these prediction markets?
>
> 1. Are they useful?
>
> They are based on the correctness of the 4 Wisdom of Crowds criteria. In
this case not all are met.
http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds
CriteriaDescriptionDiversity
ofopinion<http://en.wikipedia.org/wiki/Opinion>Each
person should have private information even if it's just an eccentric
interpretation of the known facts.IndependencePeople's opinions aren't
determined by the opinions of those around them.DecentralizationPeople are
able to specialize and draw on local knowledge.AggregationSome mechanism
exists for turning private judgments into a collective
decision<http://en.wikipedia.org/wiki/Decision_making>
.
Voting is the aggregation method. Decentralized is semi-OK but not
completely. Diversity yes, I think. Independence NOT AT ALL.
>
> 1. Are they unethical?
> 1. in Politics?
> 2. in Horrific Events?
>
> No .. the winners might contribute to the losers, for example. I'd love
to be able to hedge, but I can't see what would satisfy for your favorite
loosing. I guess if you had $1000 to put on The Evil Alternative, you'd
have something to feel good about if he/she won.
>
> 1. Are they biased when US Citizens are presumably prohibited from
> using them?
>
> Don't know about that. Because off-shore?
-- Owen
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