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Comment by jonahx | Hacker News Reader

They're far from facts, but have an important advantage over most other sources: the bettors are motivated to predict truth.

News sources are motivated to get clicks, to appeal to certain audiences, and to retain tribal customers. None of these create incentives for truth. You can seek out smart, well-informed and principled journalists who will prioritize truth-seeking over money-making. There are some. But the fact remains you are relying on character to override incentives. With prediction markets, incentives and truth are naturally aligned. This makes them a powerful and valuable resource imo, even if there is a lot of scumminess that comes along for the ride. The insiders, more than anyone, are contributing to the truth signal.

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on the other hand, similar to that one old assassination page, where you bet on the death date of people, it might encourage someone to make an event happen and thus fabricate the insider knowledge if the price is high enough.

So the feedback from prediction market turns around, so you can essentially buy events if you put enough money in.

> the bettors are motivated to predict truth.

But also motivated to bend the truth to their bet as the journalist in Israel found.

They are motivated to pick what they believe is most likely to happen. The develope their idea of what is most likely to happen for the news. The reporters use their bets to wrote stories predicting what will happen.

See the loop?

No? Where's the loop?

That's not how it works.

First, you have inside traders. Then, among legitimate bettors, you have smart people using multiple data sources (not just the "news") and doing sophisticated analysis that most journalists cannot do, and are not motivated to do -- again, because their incentives are different.

Smart people cannot predict things by 'research'. "Will the US strike Iran by X date" going from 20% likelihood to 80%+ within hours points simply to insiders.

You can do research to know the US would strike, there's no other point in moving multiple carriers over to somewhere. But exactly WHEN is not researchable. This applies to most other bets. So lets stop pretending there's anything more than 2 cohorts, insiders and degenerate gamblers.

It's an empirical fact that smart people can predict things by doing research. See Tetlock's book Superforecasting.

I've been doing it profitably myself for almost 10 years now. I have zero special inside knowledge, and no access to any other non-public information.

> Will the US strike Iran by X date

Last year I did think the market for a strike on Iran was significantly underpriced given the information and conditions within a specific frame of time.

I don't think every smart person can just pop into prediction markets and print money, but I know many smart people who are long-term winners. I also don't try to knock people as degenerate when they have genuine talent.

You haven't been profitable for 10 years on prediction markets and you being profitable doesn't mean anything in regards to insiders or the rigging of a market.

Reporters have an entirely different incentive -- they're less interested in what will happen than whether or not they get eyeballs on their story.

What gets clicks is telling people their bets are going to pay out.

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