Prediction Markets: When Do They Work? — LessWrong
I’m a little late on this, which was an old promise to Robin Hanson (not that he asked for it). I was motivated to deal with this again by the launch of Augur (REP), the crypto prediction market token. And by the crypto prediction market token, I mean the empty shell of a potential future prediction market token; what they have now is pretty terrible but in crypto world that is occasionally good for a $300 million market cap. This is, for now, one of those occasions. The biggest market there, by far, is on whether Ether will trade above $500 at the end of the year. This is an interesting market because Augur bets are made in Ether. So even though the market (as of last time I checked) says it’s 74% percent to be trading above $500 and it’s currently $480 (it’s currently Thursday on July 26, and I’m not going to go back and keep updating these numbers). When I first saw this the market was at 63%, which seemed to me like a complete steal. Now it’s at 74%, which seems more reasonable, wh