Comments on: The Zeitgeist Effect on Prediction Markets http://futuresavvy.net/2008/09/the-zeitgeist-effect-on-prediction-markets/ Making better decisions to manage uncertainty and profit from change Sun, 09 Oct 2011 22:33:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Doug http://futuresavvy.net/2008/09/the-zeitgeist-effect-on-prediction-markets/comment-page-1/#comment-2568 Doug Fri, 05 Sep 2008 01:56:14 +0000 http://www.futuresavvy.net/?p=60#comment-2568 So, do you feel that a prediction market like Intrade would have greater predictive power (i.e., more accurate predictions) if buyers and sellers had no access to the bid and ask prices, the charts, or whatever "herd data" is available? If we were somehow able to limit or eliminate the factors contributing to herd effects, I would think this would lead to more accurate results. In general, it seems that people are able to spot general trends pretty well, and maybe this is a result of the herd effect, which might be one of our cognitive advantages that have evolved over time. So if we are naturally biased towards herd behavior and as good as we humans are at spotting trends and patterns or what we think are trends and patterns, we are equally as bad at figuring out at what point a trend or pattern stops or reverses. I'm curious what the world's societies would look like if we were good at making predictions about specific events and bad at spotting trends and patterns. My guess is that humans probably would not have turned out to be the dominant species. So, do you feel that a prediction market like Intrade would have greater predictive power (i.e., more accurate predictions) if buyers and sellers had no access to the bid and ask prices, the charts, or whatever “herd data” is available? If we were somehow able to limit or eliminate the factors contributing to herd effects, I would think this would lead to more accurate results.

In general, it seems that people are able to spot general trends pretty well, and maybe this is a result of the herd effect, which might be one of our cognitive advantages that have evolved over time. So if we are naturally biased towards herd behavior and as good as we humans are at spotting trends and patterns or what we think are trends and patterns, we are equally as bad at figuring out at what point a trend or pattern stops or reverses.

I’m curious what the world’s societies would look like if we were good at making predictions about specific events and bad at spotting trends and patterns. My guess is that humans probably would not have turned out to be the dominant species.

]]>