Source: David Friedman’s Substack
by David Friedman
“A good many years ago it occurred to Robin Hanson, then a NASA scientist, now an economics professor at George Mason, that it should be possible to construct markets designed to generate information. He called his proposal ‘Idea Futures.’ If you want to know something — the average temperature of the Earth ten years from now or who will win the next presidential election — create a market where people can bet on it, buy or sell a contract giving the right to collect a dollar if global warming is more than two degrees or if Trump is elected president. The market price of the contract will adjust as other prices do until supply equals demand, until the number that people want to buy equals the number other people want to sell. The price implies a probability.” (11/01/24)
https://daviddfriedman.substack.com/p/political-prediction-markets