Open threads at the Open Thread tab every Sunday and Wednesday

Predictions & Bets

There’s a failure mode where pundits make lots of predictions (“Iraq will be full of WMDs!”, “Clinton will coast to victory easily!”), get proven wrong again and again, but keep their editorial columns and TV shows and reputations. If you’re wrong often enough, at some point people should stop treating you as a sage and start looking for wisdom somewhere else.

There’s an opposite failure mode where somebody is wrong once about some freak event and their opponents demand they never express an opinion again.

The solution is to predict probabilistically and keep careful track of your results. For example, I can say “I think there’s a 75% chance that Clinton will coast to victory easily”. If I’m right about most of my probabilistic predictions – for example, my 75% chance predictions come true about 75% of the time – then you can trust that I know what I’m talking about. If I’m wrong – for example, my 75% chance predictions only come true 25% of the time – then I don’t know what I’m talking about and you might want to ignore me.

Probabilistic predictions naturally lend themselves to bets. I try to take advantage of this to convert vague philosophical disagreements into testable arguments on real points. For example, in a thread about whether Donald Trump was racist, myself and some commenters were able to clarify our disagreements into a few points about what Trump would do on specific racial issues, then make bets about whether or not he would do them. If I’m right, I profit off of my opponents’ ignorance; if I’m wrong, I at least prove that my convictions were honestly held. In either case, both me and the people I disagree with get some real and hard-to-avoid feedback.

Every year I make many predictions about upcoming events. See 2014, 2015, and 2016. Those are recorded separately on their own pages. This page is for scattered predictions I make in the course of blogging about other stuff.

I am happy to make bets on these predictions (or my collected yearly predictions) with anyone who disagrees. Because of transaction costs, I will bet you only if our estimates differ substantially – I won’t bet if I think the odds are 50% and you think they’re 49%. In general, the “steps” I use for predictions are 50%, 60%, 70%, 80%, 90%, 95%, 99%. I will make a bet with you if you are willing to give me odds at least two “steps” away from me. If I predict something is 50% likely and you think it’s 70% likely, then bet me at 7:3 odds. If I think something is 99% likely and you think it’s only 90% likely, then bet me at 9:1 odds. If I think something is 99% likely and you think it’s 95% likely, then it’s not worth my time and I probably won’t bet you.

On some predictions/bets, the outcomes will be obvious – for example, how much the Dow Jones increases during the space of a year. For others, it might be controversial – for example, whether or not Trump does a bad job as President. If I’m making a prediction without a bet, I will trust myself to score subjective predictions. If I’m making a bet, then myself and the person I bet will agree on a neutral arbitrator to score the prediction.

Here I’m recording all the predictions and bets that I’ve made since 1/1/17

Predictions:

1. Highly-publicized stories about Trump successfully keeping businesses in the US on a case-by-case basis, which never add up to a significant number of jobs saved, will keep coming and be a central point of how his administration relates to the public over the next year. Probability: 50%. (source)

Bets:

1. Most people will misinterpret a New York Times article about economists on school vouchers. Probability: 90%. I’m currently negotiating with a possible other side for this bet by email. (source).

Comments are closed.