 Small Steps Toward A Much Better World Intercontinental Exchange (ICE.N), the company that owns the NYSE exchange, just announced a $2 billion dollar investment in Polymarket, the Ethereum-blockchain based prediction markets platform. This is a tremendous milestone for prediction markets and for blockchains.
Shayne Coplan the founder of Polymarket writes:
The Polymarket origin story is funny because it’s a rare case of the dream being identical to how things played out. If I learned one thing, it’s that bold ideas are everywhere, hidden in plain sight. It just takes someone crazy enough to spend their life willing it into existence. That’s entrepreneurship: willing things into existence.
I remember reading Robin Hanson’s literature on prediction markets and thinking – man, this is too good of an idea to just exist in whitepapers. There were a million reasons why it shouldn’t work, countless arguments of why not to do it, and the odds were against us, but we had to try.
At the onset of the pandemic, I quite literally had nothing to lose: 21, running out of money, 2.5 years since I dropped out and nothing to show for it. But I knew we were entering an era where ways to find truth would matter more than ever, and Polymarket could play a critical role in that. After all, nothing is more valuable than the truth. It’s still a work in progress, but we’re honored to have made the impact we have thus far.
The NYSE will use Polymarket data to sharpen forecasts. The next step is decision markets. Futarchy, for example, just announced a prediction market in the value of Tesla shares if Musk’s compensation package is approved versus if it is not approved. Information like this can be used to improve decisions. To see how powerful this can be, broaden it to Hanson’s 1996 idea of a Dump the CEO Market, a market in the value of a company’s shares with and without the current CEO. Very powerful. And that is only the beginning.
In my 2002 book, Entrepreneurial Economics: Bright Ideas from the Dismal Science, which featured Robin’s paper on Decision Markets, I wrote
If Hanson is right about the benefits of decision markets, then perhaps one day, instead of quoting an expert, the New York Times editorial section will refer to the latest quote on “health care plan A” available in the business pages.
That day is upon us! It probably will not happen on Monday but it is time to give Robin Hanson, the father of prediction markets, and Vitalik Buterin, the co-father of Ethereum, a Nobel prize in economics for applied mechanism design.
Addendum: My a16z podcast with Scott Duke Kominers on prediction markets.
The post Hanson and Buterin for Nobel Prize in Economics appeared first on Marginal REVOLUTION.
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