I continue to think Hantavirus becoming a pandemic this year is much less than 5%. There’s a chance the opportunity to make 10x gains on the prediction market leads a WHO insider to falsely characterize it as a pandemic in what technically counts as an “official communication.”

Andes virus, the strain of hantavirus that provoked the prediction market, is endemic in two countries. It causes hundreds of cases per year. The strain that infected the Hondius appears to be wild type. In other words, unlike COVID-19, it doe not have new, recent mutations that make it unusually efficient at infecting humans compared to its historic baseline.

If this virus had pandemic potential, I believe we’d have seen it causing the same kinds of mass outbreaks in local villages and towns that we saw in Wuhan at the start of COVID. Argentinian and Chilean villages have the kinds of rodents that spread it efficiently. If we aren’t getting mass outbreaks there, why think we’ll get mass outbreaks in regions where that rodent reservoir is absent?

None of this means we shouldn’t take it seriously. A 40% CFR hantavirus pandemic would be one of the worst catastrophes in human history. I just think that outcome is highly unlikely.

I’m not sure people on LessWrong entirely understand how Polymarket works on a mechanical level, and suspect it leads them to grossly misinterpret these markets.

Currently, the “hantavirus pandemic 2026?” market is at 8.9 cents. To participate, you and counterparty jointly collateralize a new $1 share - in this case, ”no” pays 91.1 cents, “yes” pays 8.9 cents. Your capital is then locked up for the next 7 months waiting for the market to resolve. Whoever’s correct gets $1.

If you believe the likelihood of a pandemic is 0.1% and want to sweep the order book to reflect that probability, it’ll currently cost you about $7M to collateralize all those shares. If correct, you stand to gain about $160k in 7 months - a measly 2% gain, far worse than you’d be likely to do buying and holding an index fund or even T-bills. It is below the risk-free rate. It is a worse return than the safest investment you can make.

So there’s no financial incentive to more than marginally participate for small change, and that’s discounting the possibility of insider corruption at WHO being used to generate a “yes” resolution despite no pandemic. Likely? Probably not, hard for me to quantify. Possible? It only takes one person under acute financial pressure at WHO. But this tail risk matters a lot in parsing the resolution criteria. Not that this really matters, since we’ve established there’s no meaningful financial incentive to bet on “no.”

Remember the strong cultural aspect to Polymarket. It’s regarded as a bad thing in the progressive academic circles. Particularly markets on bad outcomes like a pandemic. Whether or not you agree, it means that the experts who know most about it this topic are not only financially disincentivized from buying shares of “no,” they’re also culturally disincentivized from participating on either side of the trade. Heavy forces of adverse selection influence who participates in this market.

If you didn’t already understand this about prediction markets yet believed they are benefitting global epistemics, then does this lead you to revise your opinion? If you didn’t know it requires deep financial sacrifice to correct the prediction market probability downward, does learning that this is the case make you take it less seriously? Why or why not?