[extropy-chat] silent night

[Robin Hanson]

On 12/22/2004, Harvey Newstrom wrote:
>>Yet of all the ideas that are circulating in transhumanist circles the 
>>one that is the most interesting to me personally at present is Robin's 
>>futures market idea.
>
>Has anyone gotten any evidence that futures markets really can predict the 
>future?  I keep hearing the Iowa markets referenced as predicting 
>political elections, but I can't see it in their historical data.
>Everything I found seems to show bad results or regular flip-flopping to 
>the point that they don't predict anything.  I would sure love to see real 
>historical data showing predictions.

Did you actually go look at the IEM web site and the many papers they have 
there?  If so, you might have found: 
http://www.biz.uiowa.edu/iem/archive/forecasting.pdf

Did you look at any of the papers mentioning such claims and look up their 
citations?
For example, re an extropian angle you might have 
found:  http://hanson.gmu.edu/moretrue.pdf

>My experience with future prediction in general is that it is wrong more 
>often than not.

I predict the sun will come up tomorrow.  I will keep making this 
prediction everyday for the next year.  Go ahead, collect stats on how well 
I do.  Betcha I'm right more often than not.

>All those people who believe in this market stuff need to face the fact 
>that current markets don't believe it will work.  Current investors aren't 
>funding such a market.  Current companies aren't researching such a 
>market.  The free-market forces are currently steering away from such a 
>market.  Maybe the free-market is wrong or doesn't work.  But it certainly 
>isn't pushing for future markets right now.  Only a few rare visionaries 
>are pushing this idea.

You are making this stuff up.  You apparently have no idea what investors 
are doing.  Try:

Barbara Kiviat, 
<http://www.time.com/time/insidebiz/article/0,9171,1101040712-660965,00.html>The 
End Of Management?, Time, Inside Business, A4, July 12, 2004. 
http://hanson.gmu.edu/PAM/press/Time-7-12-04.htm

>I am not sure it is understood by economists or scientists either.
>Someone needs to set up a working model that produces verifiable 
>results.  Then people will pay attention.

There are many standard models of market microstructure which need little 
modification to apply to these markets.  These models have been around for 
decades and make verifiable predictions about lab experiments and field 
data.  For example, I applied such a model to the case of manipulators 
http://hanson.gmu.edu/biashelp.pdf and verified a prediction in a lab 
experiment
http://hanson.gmu.edu/biastest.pdf

>Right now, the existing futures markets aren't making any well-publicized 
>predictions that beat out other predictors.

By "well-publicized" you mean you haven't heard of them.  You really need 
to do a little homework if you want to have anything useful to say about 
this topic.



Robin Hanson  rhanson at gmu.edu  http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326  FAX: 703-993-2323