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by jahooma 1550 days ago
Great questions!

1) There are three insiders on this decision which would be the three cofounders of this site (including me and the OP). We wouldn't insider trade because we genuinely want to know the answer to this question. The market is also tied to what we actually do (and we're not going to lie!).

2) This is both for you to predict what we will do, and to convince us. If you propose a DB and make a case for it, you can gain in expectation because maybe there really is like a 7% chance we'd pick it. So buying up shares from 0-7% is a win for you.

Alternatively, if you think that one DB choice is much better than the others, and we would be somewhat likely to figure that out, then you might gain by buying shares in that answer.

Basically, I think the incentives are good! We're using a more rigorous mechanism — prediction markets! — to do Q&A better than Stack Overflow.

2 comments

1) Cool. I'd add it's really important that everyone knows and believes that you won't insider trade, otherwise they might get scared off of participating. So the perception is important too.

2) Right, so, the way this can go wrong in theory (not saying it will happen in practice) is if a large group of users, or a small group with a lot of points, decide to all get together and focus on one alternative regardless of how good it is. They predict that alternative really strongly and vote against / predict against all the others.

Then, again in theory, you (the site operators) look at the votes and say 'wow, this database must be much better than all the others, we'd better use it.' Then the colluders all get their predictions proven true, so it's a self-fulfilling prophecy.

Here's one research study that looked at this kind of issue, although they end up not finding a lot of manipulation: https://www.researchgate.net/publication/315529106_Manipulat...

But you are not asking what you should switch to, you are asking users to predict what you will be using on a certain date.

Prediction markets are supposed to have insiders buying in. Nothing wrong with that, but they are not supposed to be self fulfilling prophecies. Right? And certainly the prediction market itself should not be the insiders.

>>> [Prediction markets] are not supposed to be self fulfilling prophecies. Right? And certainly the prediction market itself should not be the insiders.

We've thrown out all the rules. Why can't the prediction market be a self-fulfilling prophecy? Why can't the market outcome be decided by insiders?

What matters is what the incentives are. I say the incentives here are for you to point us to the most useful database and argue for it. That helps us.

Our incentive as insiders is to be truthful about our choice, because we want to incentivize you to help us choose a database.

There is a lot of evidence that prediction markets work best when they are inside markets.

Yes there are problems with that!