Note on Money Stuff: Untruth Machines via Matt Levine

Prediction markets are “truth machines,” in the sense that they give people incentives to figure out what is true and bet on it. But they are also, obviously and increasingly, falsehood machines, in the sense that they give people incentives to make bets and then distort reality to make those bets pay off. Because of prediction markets, it is now lucrative to figure out what song will be the most popular, but it is even more lucrative to make a different song look most popular. Prediction markets can make it harder to know what is true.

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FROM:

Matt Levine

Money Stuff: Untruth Machines

I guess this is kinda how the stock market and any market works, too? If people can game the incentives, some will, of course, cheat. No market is a truth machine.