Prediction Markets + Market Predictions = Collective Forecasting That Pays Off

Could prediction markets help our society to become more truthful?

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[...] [About the Iraq war] – “There is no question that America is living a nightmare with no end in sight,” retired Lt. Gen. Ricardo Sanchez told a convention of military journalists on Friday. [...]

But why didn’t he come forward before, then?

[...] Asked why he did not speak out about his concerns, Sanchez said general officers take an oath to carry out the orders of the president while in uniform. “The last thing that America wants, the last thing that you want, is for currently serving general officers to stand up against our political leadership,” he said. However, general officers do have the option of stepping down if they disagree with the country’s leaders. Sanchez said he felt he could not resign and go public with his reservations while he was in Iraq, because he feared that move could further jeopardize troops serving there. “I think once you are retired, you have a responsibility to the nation, to your oath, to the country, to state your opinion,” he said.

Associated Press:

Retired Lt. Gen. Ricardo Sanchez

We can’t rely on retirees to tell us the truth. We need an anonymous information aggregation mechanism that gives an incentive to people who come forward with advanced information: the prediction markets.

2 Comments to Could prediction markets help our society to become more truthful?

  1. October 13, 2007 at 12:56 PM | Permalink

    As a believer in civilian control over the military (rather than the other way around), I have to agree that we don’t want general officers standing up against political leadership. However, it seems like there must be ways for contrary information to flow from the military to the political leadership short of rebellion.

    Overall, it seems like an extreme case of the ‘blocked flow of information within organizations’ discussed in a previous post.

    I agree with Chris that “anonymous information aggregation mechanism[s] that give[] an incentive to people who come forward with advanced information” may be called for. It occurs to me that journalism (both traditional and new) can also provide an “anonymous information aggregation mechanism,” though the incentive structure doesn’t always direct rewards toward those who reveal the most useful information.

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