Robin Hanson: belief

Transcript context

…Drawing these two worlds of prediction markets and the signaling, if investing in prediction markets is not about predicting underlying policy or any of the things we are trying to understand by prediction markets would signal, if 90 percent of what we do is signaling there, would that impact the advantages of having prediction markets? Did you think about it? I think many people favor prediction markets as a political signal of the kind of things they like in the world. That is, people want to take the stance that they’re in favor of truth and accuracy, and they’re against all those people out there who are lying and hypocrites. So they might want to take the stance of favoring prediction markets even if they don’t actually want to look at the answers or trade in them, as a signal, as a stance about the world. If I could have a follow-up, aren’t prediction markets, in essence, going to teach us how to signal better and thus waste more resources? In economic terminology, they’ll push us more into separating equilibria, and if we simply knew less, we’d be more in pooling equilibria, where you don’t distinguish yourself. The prediction market will tell you what are the right clothes to buy to impress someone on a date, or how to spruce up your resume, and if 90 percent of everything’s signaling, it will make signaling worse, no?…

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