1. Thanks for the links.
2. A GREAT question. Am I understanding you right in that you are
looking for what TYPES of problems lend themselves to prediction
markets vs which ones do not? If so, I'll take a rough stab at it -
with certainty someone else will improve upon it. Problems that have
solutions who's value can be relatively easily MEASURED lend
themselves well to prediction markets.

For instance:
* "How much will person X love person Y in 10 years" is probably too
hard to quantify in any meaningful way. However...
* "What are the odds person X will still be married to person Y in 10
years" is straightforward.
* "School choice will improve educational achievement" is hard to
quantify. For what students? By what measure? How about all those
lovely squishy things like "critical thinking ability" that don't show
up on the SAT?

The above brain dump makes me wonder if prediction markets are well
suited to answering "big" questions. After all, isn't it so much
harder to disentangle cause and effect with big problems?

If someone were 2 years ago were to propose "This infrastructure
project will increase GDP by 10% in five years"... and then this
current economic crisis hits us. Maybe the GDP did increase BECAUSE OF THE
INFRASTRUCTURE by 10%, but the economy as a whole ends up
shrinking by 5% so... the project WORKED but GDP (or GDP+) is a
measure too prone to other factors for us to be able to use it for any
but LARGE IMPACT items.

Thoughts?

--- In futarchy_discuss@yahoogroups.com, David Curran
<david.curran@...> wrote:
>
> > Much like the problem's futarchy aims to solve, early stage
private equity
>
> investments represent a bunch of smart people trying to guess the
future.
>
> What other areas do people think might have more accurate resource
> allocation using prediction markets?
> Science http://hanson.gmu.edu/gamble.html
> education
> http://cynicuseconomicus.blogspot.com/2008/07/reforming-education-
market-based.html
>
> Any other areas?
> Regards
> David
>
> 2009/2/8 Paul G. Silva <paulgsilva@...>
>
> > Howdy folks,
> >
> > My name is Paul Silva, I'm an entrepreneur who works primarily in
the
> > Angel Investing world
(http://en.wikipedia.org/wiki/Angel_investing).
> > I learned of futarchy about 6 months ago and have been fascinated
by
> > it ever since. And while I found the original whitepaper extremely
> > dense and difficult to process (this is not my native field!), I
found
> > Robin's humility in knowing that he does NOT have THE answer - but
> > hopefully a SYSTEM to find BETTER answers. That concept in and of
> > itself is deeply intriguing to me.
> >
> > Futarchy also has some relevance to my day job of angel investing.
I
> > run a professional angel investor group - AKA a few dozen
successful
> > entrepreneurs who are looking to invest in hopefully-soon-to-be-
> > successful entrepreneurs with young companies. Much like the
> > problem's futarchy aims to solve, early stage private equity
> > investments represent a bunch of smart people trying to guess the
> > future. They buy stock in the young companies and then, for the
most
> > part, have to sit on that stock until either the company dies or
> > generates a liquidation event whereby the investors can cash out.
It
> > is extremely difficult to guess which companies will and will not
> > succeed.
> >
> > Anyway, enough from me. I have a lot more back-reading on this
forum
> > to catch up on. Thanks for creating another place for people to
> > discuss this interesting concept.
> >
> > -Paul (www.angelcatalyst.com)
> >
> >
> >
>