Betting on Reality

Everybody’s talking about prediction markets. In the hours before the US struck Iran, a cluster of large anonymous bets landed on exactly the right answer as to when the war would start.But almost nobody is explaining what these markets actually are, how they work, or why they keep getting the future right when everyone else gets it wrong. My guest on last week’s WhoWhatWhy podcast is Robin Hanson, an economist who saw this coming.A professor at George Mason University, he started the first internal corporate prediction market in 1990 — decades before any of this was an industry — and invented much of the mathematical machinery these platforms run on today. He’s watched prediction markets get killed by Congress, dismissed by regulators, and ignored by the institutions that needed them most. Get full access to Talk Cocktail Podcast at jeffschechtman.substack.com/subscribe