If it doesn't use real money the predictions will be garbage.
"Why do you have to use real money?"
Prediction markets work best when players have some stake, however small, in the outcome. With play money, many players take risks they wouldn’t otherwise take or don’t attend to their holdings as carefully. Such markets may therefore have less research value than real money ones. Besides, we think real money is fun too.
I’ve even seen that getting people to bet with real money and they will be exponentially more careful, diligent and down to earth even if it’s just lunch money.
Reputation is also not that great of a proxy, since you can game it. E.g. by using strategies that push all the risk into the tails. If it's money, you have a much stronger incentive to cover your ass against rare but disastrous blowups, since your entire livelihood is at stake (rather than just your ability to play the local game). If you're just trying to look good on Facebook... The risk/reward is different.
https://en.wikipedia.org/wiki/The_Good_Judgment_Project
> Predictions are scored using Brier scores.[6] The top forecasters in GJP are "reportedly 30% better than intelligence officers with access to actual classified information
You can't bet more of your points in GJP if you are really sure about an answer, hence it isn't a prediction market.
That doesn't give it better predictive powers - and maybe the opposite.
Uprating people with a historical record of accuracy is likely to be at least better than wealth as a marker.
I ran a project in this area for a few years, and saw significant issues. For example, for high-stakes predictions (eg elections) we saw significant gaming because people see it as an opportunity to move the media narrative.
We've seen this in the current US Presidential Elections, with big swings in betting markets for the presidential outcome itself, without the same swings in related outcomes (eg, you see a swing in the price for "the winning president is X" without the price for "X gets above 270 electoral votes changing at all")
Obviously this creates arbitrage opportunities, but the media narrative is the real issue. Have you considered this problem at all?
Edit: Here's an account of manipulation of betting markets during the Obama/Romney election: https://rajivsethi.blogspot.com/2013/09/the-romney-whale.htm...
My question is: I am sure you guys are familiar with crypto-based prediction markets like augur.net and prediqt.everipedia.org that use smart contracts and real money for predictions. Given that facebook is also building Libra and getting into blockchain, do you guys see that down the line Forecast could be something that moves to facebook's blockchain and/or you guys collaborate with crypto-based products like the above mentioned? That would be truly exciting since it would bring pure market dynamics to the predictions. I'm aware of the regulatory hurdles there, but thought I'd ask anyway. Great job! This is so fun to use.
• In Chrome, the website log in system fails silently (and we get "FB.login() called when user is already connected" when retrying).
• The website is blank on Firefox.
• The principle is cool, but not Bayesian enough IMO. Points are expendable (especially when one can get them freely by creating a new account). Better use statistical priors estimating the likelihood that a given source outputs an accurate prediction. Give a bad prior to new accounts, to discourage creating new accounts to "clean the slate" of bad predictions.
• In the current state, this system, if it gets popular, can quickly have diplomatic, political and economic repercussions and consequent abuse that the website seems wholly unprepared for, based on my reading of the guidelines.
Do you have Firefox FB containers enabled? I had the same issue, but when I opened the website inside a FB container it works.
What technology is used for the mobile apps?
Has there been any risk assessment on this feature? If so, any chance this is made public?
Edit: I missed that this was coming out of NPE (New Product Experiments). Still I'm not sure why this would make sense for FB to run, but it's less odd knowing that it's an experiment.
If they can credential experts based on some metric that isn't based on their editorial discretion, they have more grounds to call themselves a "platform." Not saying I agree, but makes sense given their position.
Data gathered from here is explicit, and this much more reliable than what you can implicitly infer from users' behavior.
Prediction markets also typically use money to incentive people not to make garbage bets, but by having web credibility be the stakes, the conversation of bad incentives for bad events is a little more distant.
https://en.wikipedia.org/wiki/Superforecasting:_The_Art_and_...
A lot of work has to be done on overcoming cognitive biases and accounting for black swan events in order to attain high level performance.
Nonetheless, empirically some people are better than others at the task of assigning probabilities to events (as insanely hard as it is!) at a level above random, and it's a learnable skill that gets better with more people.
The Superforecaster approach absolutely should account for this, and to some degree does. You won't see anyone who has done superforecaster training saying things like "It is 99% likely X will win a two horse race election" before any votes have been cast.
Facebook's version of betting on horseraces and other sporting events?
Am I wrong? I'm not sure exactly what this is other than you're trading in people's predictions.
Which pretty much sounds like when you go down to a bar and place bets on a boxing match or something....except with everything and it's run by facebook.
Like this sounds like a marketplace for people to put odds on everything then other people come place bets and it's all run by facebook.
Did I miss something here or interpret this wrong??
This seems ridiculous...it should be called gambling on global affairs by facebook..
A popular one is PredictIt: https://en.wikipedia.org/wiki/PredictIt
But in the end...call it what you want...it's gambling..
And then if Candidate A wins, I get a payout and use it to finance my moving abroad.
Even if people value a "reputation" the way they want HN or Reddit karma... people's behavior is ultimately extremely different. They make wilder bets "just for fun", because the rewards are highly asymmetrical: everybody cares if you're top of the leaderboard, nobody cares if you're in the bottom 95%, so the rational strategy is to make wild improbable bets and hope you get lucky, because there's lots of upside if you win and zero downside if you don't. (Or create 1,000+ different accounts to cover every combination of outcomes, and only publicly claim ownership of the one that wins the most.) All of this necessarily "pollutes" predictions making them ultimately worthless.
Prediction markets have to use real money people care about not losing. There is simply no way around that principle.
Poker players are well aware of this: advice on learning poker stresses how important it is to play for money as opposed to "fake money", because you and the other players will all play differently. (Play money is only when you're learning/practicing the basic mechanics of the game.)
Now of course, prediction markets have the unfortunate necessary side effect of people making money off of morally abhorrent events -- literally profiting off of a genocide or terrorist bombing -- when they successfully predict them. And a lot of people also see it as closer to gambling than investing. Which is why I can't ever imagine a large corporation like Facebook designing one -- it would be suicidal PR.
What's more, with Facebook attached, this will probably be the most prominent predication market yet known... Tbh, it would have been more on brand for Twitter to do this, but it's still very cool. I think the volume and kudos associated with the scale the brand name will bring, will make this one of the more successful products of it's type, in terms of results.
The issue is that people's contributions will be highly skewed, for the reasons I listed.
Here's an analogy: imagine someone starts a separate stock market with play money, but asks everyone to invest "as if they would with real money". Do you really think that stock market will track the real stock market, even remotely?
Of course not. It'll be full of wild swings, people will make decisions for entertainment, nobody will pay attention to market fundamentals, because nothing is tethering it to reality.
A prediction market without real money suffers from the exact same problem.
I don't think open source or internet forums are a valuable analogy here, unfortunately -- pull requests are accepted or rejected by a maintainer, Wikipedia has very strict rules on what is accepted, and misinformation on Twitter and Reddit is rampant. A prediction market attempts to provide actual objective predictions without anyone in charge, which makes it totally different.
https://www.legalsportsreport.com/37949/2020-presidential-el...
It seems to be more like a clone of the Good Judgement Project.
Edit: Apparently there are shares. I can't tell because I'm not in the US/Canada and they don't appear mentioned anywhere.
Also, it is a form of engagement for Facebook users, which is valuable in itself.
It came from the New Product Experimentation team.
When showing how many points another user has, such as next to a comment they made, it would be better to show their entire net worth of points (if they sold everything how many points would they have) instead of their available to spend points. I’m interested in knowing how successful their previous predictions have been, not in how much liquid capital they have.
(And Mike Pence betting on a 999/1 -> 39/1 plunge, presumably an over-reaction to the COVID news prior to the market being suspended!)
Do you directly compete with them? Nothing wrong in competing, I have a feeling that people are probably more _aggressive_ (in a positive sense) in their outlook when "Facebook profiles" are not on the line. Nevertheless, I think it is a great experiment.
I do imagine that at some point, if this product goes mainstream, journalists would start referring to these statistics for topics which really require correcting for exposure bias. For instance, exit polls. In places where Facebook penetration (or even internet penetration) is not-so-great, this will blindside decisions. Of course, this by no means will be Facebook's fault but I am curious to see how Facebook is proactively adjusting for this adverse outcome.
I am interested in prediction markets however I think that it lives in Facebook is a net negative.
Facebook’s monetization of personal data and behavioral insights disrupts the potential value of even trying a new product.
[0]: https://asindu.drileba.capital/2020/06/the-wisdom-of-rationa...
