Why don't more businesses use prediction markets? - Marginal REVOLUTION

A few months ago I was at a conference where Robin Hanson spoke about prediction markets.[1] He argued that given how much of companies' outcomes are driven by who they choose to hire, and how non-rigorous the process of selecting employees and revisiting those selections is, there's a literal trillion-dollar opportunity in getting it right. Predic... See more

This concept of the staking of limited resources as a measure of how strongly beliefs are held and likely to come true is why prediction markets like sports books or Metaculus are often seen as the best sources of truth for the future.

In a prediction market, it is relatively more difficult: maybe you are trading with someone who has natural exposure to a Russian invasion and is just looking for a hedge, but more likely your counterparty is, like, a guy who speaks Russian and is in dozens of Telegram groups waiting for just the right moment to trade against your resting order.

The uptake and growth of prediction markets has been dampened by regulatory issues, but possible workarounds include a non-fiat token, or reputation-linked points system.