So, I've been thinking about prediction markets and why they aren't really catching on as much as I think they should.
My suspicion is that (beside Robin Hanson's signaling explanation, and the amount of work it takes to get to the large numbers of predictors where the quality of results becomes interesting) the basic problem of prediction markets is that they look and feel like gambling. Or at best like the stock market, which for the vast majority of people is no less distasteful.
Only a small minority of people are neither disgusted by nor terrified of gambling. Prediction markets right now are restricted to this small minority.
Poker used to have the same problem.
But over the last few decades Poker players have established that Poker is (also) a sport. They kept repeating that winning isn't purely a matter of luck, they acquired the various trappings of tournaments and leagues, they developed a culture of admiration for the most skillful players that pays in prestige rather than only money and makes it customary for everyone involved to show their names and faces. For Poker, this has worked really well. There are much more Poker players, more really smart people are deciding to get into Poker and I assume the art of game probably improved as well.
So we should consider re-framing prediction the same way.
The calibration game already does this to a degree, but sport needs competition, so results need to be comparable, so everyone needs to make predictions on the same events. You'd need something like standard cards of events that players place their predictions on.
Here's a fantasy of what it could look like.
- Late in the year, a prediction tournament starts with the publication of a list of events in the coming year. Everybody is invited to enter the tournament (and maybe pay a small participation fee) by the end of the year, for a chance to be among the best predictors and win fame and prizes.
- Everyone who enters plays the calibration game on the same list of events. All predictions are made public as soon as the submission period is over and the new year begins. Lots of discussion of each event's distribution of predictions.
- Over the course of the year, events on the list happen or fail to happen. This allows for continually updated scores, a leaderboard and lots of blogging/journalistic opportunities.
- Near the end of the year, as the leaderboard turns into a shortlist of potential winners, tension mounts. Conveniently, this is also when the next tournament starts.
- At new year's, the winner is crowned (and I'm open to having that happen literally) at a big celebration which is also the end of the submission period for the next tournament and the revelation of what everyone is predicting for this next round. This is a big event that happens to be on a holiday, where more people have time for big events.