EDIT: Moved to the correct location in the discussion tree.
It's very frustrating for me to see "probability of a law passing" and "severity of global warming" being thrown in the same basket.
While the first lends itself naturally to be framed as a binary prediction market (and there are good reasons to believe that the market will produce reliable forecasts), "severity" doesn't lend itself to be framed in this way (in Taleb terms, it is a non-linear payoff from a complex domain, "4th quadrant"). Ignoring that there is a lot of ideology involved in defining the exact terms, in my mind it is just unreasonable to expect prediction markets (or any mechanism for that matter) to deliver reliable results in this case.
Even when not accepting the Taleb argument regarding our ability to predict, at least it should be acknowledged that it is not straight-forward to generalize from binary outcomes to open-ended ones.
It's very frustrating for me to see "probability of a law passing" and "severity of global warming" being thrown in the same basket.
While the first lends itself naturally to be framed as a binary prediction market (and there are good reasons to believe that the market will produce reliable forecasts), "severity" doesn't lend itself to be framed in this way (in Taleb terms, it is a non-linear payoff from a complex domain, "4th quadrant"). Ignoring that there is a lot of ideology involved in defining the exact terms, in my mind it is just unreasonable to expect prediction markets (or any mechanism for that matter) to deliver reliable results in this case.
Even when not accepting the Taleb argument regarding our ability to predict, at least it should be acknowledged that it is not straight-forward to generalize from binary outcomes to open-ended ones.