I Championed Prediction Markets. Look What They've Become
I helped build the case for freeing prediction markets, hoping they would surface vital economic information. Instead, platforms like Kalshi and Polymarket have become backdoor sportsbooks, while asymmetric information scandals, like a White House teleprompter operator betting on the President, reveal deep flaws. With Trump Media potentially monetizing official policy announcements, the dream of an information aggregation machine has been overshadowed by gambling addiction and corporate greed.
We built a superior information aggregation machine for the economy, and the ideas are being used to create a backdoor sportsbook.
- dwb
If you ever thought “prediction markets” were a good idea, you should leave economic judgement to other people. Go take up gardening or something instead. It’s a hack reference at this point I know, but it’s Idiocracy-level stuff.
- Glyptodon
This reminds me of how people who worked for Facebook despite it being obvious that nobody with moral fiber should work for Facebook are more listened to when criticizing Facebook than people who realized the obvious to begin with. It's such a farce.
But it also reminds me that prediction markets are one of those things that are transparently a terrible idea because they create problematic incentives, and not just because people ruin their lives gambling. If you can make $1 million by triggering something that or getting somebody to trigger something that basically has no business happening, whether it's stripping on the Senate floor, causing a volcano to erupt, or crops yields to reduce by secret herbicide dusting, or any other bologna, somebody will do it if the balance makes it worthwhile. Likewise, they give people reasons to vote that are negative - "I have $100 on prop XYZ passing, of course I support it." (Though side note: the ubiquity of betting being super terrible for society because people can't handle gambling at all is one of those things that I've been super surprised by that seems to have good evidence now. I guess because gambling mostly just doesn't do it for me to the degree that I find it shocking just how addictive it is and just how much it exacerbates bad situations for many people.)
And I can't see how there's any benefit that's bigger than the problems. If prediction markets are better than Nate Silver, why is it worth all the problems to society for […]
- ElProlactin
> And I know exactly what that costs: Before I was an economist, I was a teenager working for bookies on Australian racetracks. I once took five dollars from a coworker who “didn’t bet” and put it on number one in the next race. Six months later he was betting thousands a race and stealing from his own family. Compulsive gambling destroys lives — and the families it wrecks have no lobbyists.
> I don’t claim to know the exact right policy answer for America. But I know we never even had a grown-up debate.
If you've seen the destruction caused by something and can't figure it out, maybe you have a problem?
And let's be honest: the idea of "debating" things that are obvious is often one of the primary ways by which indefensible things are legitimized.
- gaze
is this the author's attempt at washing their hands of the damage they've done? Smart enough to win all these prestigious economics awards and hold all these prestigious positions but too naive to be able to predict the consequences of what they've been fighting for? Things that were, in my opinion, very easy to predict, given all the regulation in place around existing markets. What does this say about the author and the field of economics? Every day we get to play the "dumb or awful?" game.
- ggm
Put the same energy into championing regulation then. Don't walk away from a mess you claim to have helped create. (which the OP may indeed be doing, but it isn't clear they are, hence the chiding)