These prediction markets shouldn't be allowed for situations where humans can control the outcome.

They do have their place however - one I find particularly interesting is weather prediction markets, primary because they end up having a net benefit. Hundreds are creating their own weather prediction models and are duking it out. Over time these models get better, and the rest of us benefit.

I think these markets could be a net good, but right now they're just enabling insider trading on a scale we've never seen before.

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zovirl an hour ago | parent | next [-]

With enough cash on the line, humans are very resourceful at manipulating outcomes.

Humans already control the weather: https://en.wikipedia.org/wiki/Cloud_seeding.

We already have an example of humans sabotaging the measurement of weather: https://news.ycombinator.com/item?id=41684440. Two ranchers sabotaged weather monitoring stations in order to fraudulently collect millions in drought insurance. One of the farmhands involved ended up dead.

And we have an example of prediction markets attempting to manipulate reporting of events: https://news.ycombinator.com/item?id=47397822.

I have a hard time believing weather prediction markets will be net beneficial. The incentive for sabotage & manipulation up and down the chain seems likely to lead to worse weather predictions overall.

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Rapzid 3 hours ago | parent | prev | next [-]

Who is to say if it rained or not? Well now they are a target.

A NY Times reporter was the target of a pressure and threat campaign to change their reporting over whether a rocket in the middle east was intercepted or not before it hit the ground.

Prediction markets are not going to end well full stop IMHO.

	▲	LeifCarrotson an hour ago \| parent [-]
		That was a Times of Israel reporter Emanuel Fabian [1] but your point stands. Prediction markets create incentives to predict the outcome of an event, which can be done in one of three ways: develop better models to predict the event, affect the event, or affect the reporting on the event. [1] https://www.timesofisrael.com/gamblers-trying-to-win-a-bet-o...

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simgt 3 hours ago | parent | prev | next [-]

Or you could just fund the NOAA instead of making up reasons for more markets.

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kqr 4 hours ago | parent | prev | next [-]

> weather prediction markets

Can also be used to hedge the risk of rain on the day you've planned an outdoor barbecue!

	▲	debatem1 4 hours ago \| parent [-]
		You can do this with some forms of trip insurance. I stared hard at arbitrage there a few years ago but it was too hard to get your money out if you were right.

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themafia 4 hours ago | parent | prev [-]

> is weather prediction markets

Humans can, and do, manipulate the weather. There's actually international treaties against doing it.

> Hundreds are creating their own weather prediction models

Weather is chaotic. You don't run a model once and use the result. You run it hundreds of times and average the results. You also need really high quality real time data to be fed into the system to achieve any sort of accuracy, which, is not something any of these hundreds could do on their own.

> markets could be a net good

You can already sell weather predictions. You can just hang a shingle and do it directly. Why do we need a third party gambling apparatus involved?

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adamandsteve 4 hours ago | parent [-]

> Why do we need a third party gambling apparatus involved?

Wisdom of crowds > wisdom of individual firms, also a market solution actually would work in this case imo. Manipulating the weather seems easy enough to detect and much more expensive than any benefit you'd get, and there aren't really any negative externalities.

	▲	themafia 3 hours ago \| parent [-]
		> Wisdom of crowds > wisdom of individual firms I doubt the utility of this simple aphorism. Primarily "the crowd" has a strong bias and would only consist of people willing to take the time to put a financial stake on their position. > Manipulating the weather seems easy enough to detect What are you basing this off of? > and much more expensive than any benefit you'd get Cloud seeding is not particularly expensive. The problem is the people performing this work may never interact with your market. You're literally playing a rigged game without any clue. > and there aren't really any negative externalities. The folly of man in a single sentence.