Prediction Markets

Introduction

People have a great interest in intelligence, our individual intelligence is a strong predictor of relative success in life, whether measured by income, education level, health, or lifespan. The current hype around artificial intelligence (AI) shows a deep desire of human actors to boost our individual intelligence for even more success.

Yet, it is self-evident that by far the biggest influence on the wealth and happiness of people are good collective decisions by our companies or our governments. Only by working and living together we can harness the enormous advantages which division of labour and specialisation bring to our comfortable modern lives.

Therefore, I suggest that we should turn our attention to a third kind of intelligence, the most important of them all: collective intelligence (CI).

Getting collective intelligence

The following seven chapters tell the story of my search for collective intelligence and my current understanding after a decade of experimentation and practical work. Just like every dwarf, I stand on the shoulders of giants, so I summarise a short history, recount more recent progress and conclude with my best current understanding in how to get it by a collective communication and learning system: prediction markets.

1. History: A poll without polling
2. Early stage: First commercial promise
3. Madness or wisdom: Are crowds intelligent?
4. Behavioral theory: System 1 or 2 OR 3
5. The third party perspective
6. Small biases, big errors
7. Falsifiability is key

Next: A poll without polling