Free Money at Intrade!

declares Eliezer Yudkowsky (via Mike Giberson):

If you think that Hillary is going to do better than the polls on Super Tuesday, and you're going to sneer afterward and say that Intrade was "just tracking the polls", buy Hillary now.

If you think that Obama is going to do better than the polls on Super Tuesday, and you're going to gloat about how prediction markets didn't call this surprise in advance, buy Obama now.

If you don't do either, then clearly you do not really believe that you know anything the prediction markets don't. (Or you don't understand expected utility, or your utilities over final outcomes drop off improbably fast in the vicinity of your current wealth minus fifty bucks - you don't have to bet the full $250.) It is free money, going now for anyone who genuinely thinks they know better than the prediction markets what will happen next.

Prediction markets do not have supernatural insight. If they give the candidates fifty-fifty odds, it means that the market collectively doesn't know what will happen next. Even if you're well-calibrated, you get surprised on 90% probabilities one time out of ten.

The point is not that prediction markets are a good predictor but that they are the best predictor. If you think you can do better, why ain'cha rich? Any person, group, or method that does better can pump money out of the prediction markets.

If prediction markets react to polls, they're getting new information, that they didn't predict in advance, which happens. Being the best predictor doesn't make you omniscient.

Everyone's going to find it real easy to make a better prediction afterward, but if you think you can call it in advance, there's FREE MONEY GOING NOW.