Moved from article:
To bet on outcomes is the entire basis of market dynamics. It is not optional in thinking about markets. There is some question as to whether bets could play a constructive role in the Content Wiki. Here is a suggestion that they might:
Prediction markets are a committed way to "put a bet on record" which helps others to see which bets you really believe, versus those you make just casually. Unlike bets in the commodity markets or currency markets, a prediction is normally attributed to some person, who may be trying to build up a reputation for successful prediction. But the voting, debating, etc., around the bet is the point - the commitment and the contrast between people taking up opposing positions, helps focus that and concentrate it on a specific test - the same way scientific theories exist to focus attention on one experiment.
For an excellent example of how bets and commitment to taking one side of a bet can focus political debate, see http://www.longbets.org/129
This is like off-topic for now, but I've noticed there are two kinds of betters:
- Those who bet on the outcome that determines who wins and who loses
- Those who bet on the other betters being stupider/brainwasheder/malinformeder then I
- Yes, the latter "invest" in "derivatives" which basically are bets on the rise or decline in values of other bets: futures, options, and so forth.