(2021-12-02) ZviM Covid Prediction Markets At Polymarket

Zvi Mowshowitz: Covid-19 Prediction Markets at Polymarket. We now have some useful prediction markets up on Covid issues, so it’s worth looking at what they say and thinking about what other markets we could generate

As I wrote a while ago, if you want prediction markets to be successful, you need five elements

To these, of course, we can add an implied sixth, which is: Real Money. Money talks, bullshit walks. Are we doing this or not?

I’m glad I’ve been able to help them figure out what markets to offer.

Will Omicron be >1% of all USA cases by the end of the year?

It was my suggestion to use a relatively low threshold like 1% of cases, in order to allow the market to resolve faster

Currently the market is putting this result at about 67% to happen within the month

Will the FDA give emergency use authorization or otherwise approve Paxlovid before 2022?

Looks like it’s a toss-up whether it will happen by the end of the year.

There doesn’t seem to be any sense of special urgency coming from the FDA. The flip side is that there is outside pressure on them on this one (that hopefully I am helping to increase somewhat), and the symbolic cost of this not stretching into 2022 seems non-trivial

Will the Omicron variant be marked as a Variant Of High Consequence by the CDC before 2022?

By the definition, it seems like there is a much higher than 10% chance that this will ultimately be a variant of high consequence. The second question then is how often that would cause the WHO to make that declaration by the end of the year? The WHO tends to always be behind the curve and hates doing useful things under uncertainty, so they’d essentially need proof.

What we’d like to know, more than whether the WHO will officially acknowledge that Omicron is a VOHC quickly, is whether Omicron actually is such a variant, and to what extent. That would unfortunately require some combination of a longer-dated market and a means of resolution that would answer the question.

Will the United States report a record high 7-day COVID-19 case average before January 1, 2022?

Oracles

The best way to resolve a wager is to have a reliable source and a well-defined outcome. Unfortunately, for many of the things we care most about, this is not possible

We can designate a trustworthy person or small group, and let that person decide the outcome. My suggestion, with his permission, is that this person be Scott Alexander.

Future Prediction Markets

What other prediction markets about Covid-19 would provide high information value, while being sufficiently well-defined and short-term?

Thus, the proposal to use a trusted person, or trusted small group, as an oracle.

at Polymarket, a prime motivation of liquidity providers is to use the markets to generate information, providing motivation in turn for others to come participate.

This is one of the big issues with prediction markets in practice.

There are three new markets up, let’s check them out.

We need real money prediction markets if we want to rely on their information. I’m glad Metaculus exists and puts up some markets, and it’s good for getting some idea at all, but it is not remotely the same thing

Another proposal is to use a social mechanism. The Augur protocol, for example, resolves markets by splitting its entire chain in two if there’s sufficiently robust disagreement, assuming the truth-tracking chain will be the valuable one. I do not much trust that assumption, and it turns truth into a social phenomenon or one about money, influence and power.