tag:blogger.com,1999:blog-2477329189905907968.post2177694138447482846..comments2023-05-31T11:46:50.421+02:00Comments on Financial Translation Blog: The Wisdom/Madness of Crowds: Obama, Hillary, New Hampshire, and MeMiguel Llorens M.http://www.blogger.com/profile/06617102771655076833noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2477329189905907968.post-11531794835201257852012-02-07T23:07:41.929+01:002012-02-07T23:07:41.929+01:00Aha, I am guessing that you read a lot of science ...Aha, I am guessing that you read a lot of science fiction? Yes, I had not thought of that. In a world in which prediction markets acquired prediction status, anybody who could "game" the prediction market could (to some degree) "game" the reality that is being predicted. Let's call it the "Minority Report" hypothesis. People who believe in strong version of the efficient markets hypothesis would dismiss that as impossible, but anyone who has seen successful manipulations of very large markets would take that possibility into consideration.Miguel Llorens M.https://www.blogger.com/profile/06617102771655076833noreply@blogger.comtag:blogger.com,1999:blog-2477329189905907968.post-48145611871433072182012-01-31T15:27:11.584+01:002012-01-31T15:27:11.584+01:00Luckily I had never heard of InTrade. Why 'luc...Luckily I had never heard of InTrade. Why 'luckily'?<br /><br />If many people believe in the wisdom of the crowds and there is a place where this wisdom plays a central role, what would happen if someone where to place an extremely large amount of money on a particular bet? If InTrade was really well-known and its predictions considered relevant, the trends (bets) themselves could affect reality. Thus, someone with a hidden agenda and enough money could have gotten Obama elected in NH just because of the initial bets.<br /><br />Self-fulfilling prophecies = BAD.<br /><br />So, it is better not to believe in the wisdom of crowds. We are a little bit freer this way.Jordi Balcellshttps://www.blogger.com/profile/00200189720838442406noreply@blogger.com