Getting a MultiChoice Forecast Just Right
This is a follow-up to Multi-choice “Publication” Markets.
This extended example is just to give you a better feel for linked multi-choice questions. It’s probably a bad idea to forecast like this because:
- I’m making big, expensive trades for dramatic effect. Unless you are either impatient or skilled, make smaller moves first, and see how the market reacts.
- The best strategy is always to fix the most-wrong. After the first trade below, all three probabilities move towards your goal, so it’s likely some other preprint question is now most-wrong.
- Getting it just right is a waste of time until the end: someone will just come by and change it on you.
That said, let’s go. Here’s a preprint with the three Publication claims – High / Low / No – starting at ~33% each.
Without even looking at the claim, I decide they should be 10% / 40% / 50%.
Using Quick Forecast for speed:
- 1) I’ll raise No to 58% – overshooting a bit because I know Step 2 will reduce it.
That will drop the others to 21% each. (Wait a few seconds for the refresh.)
- 2) Next, I’ll raise Low to 40%. That will reduce both High and No, proportional to their values, so High will reduce by more — that’s why I overshot in Step 1:
- 3) Nuts, not close enough. I now think High is the most wrong -> it should be near 10%.
- 4) Good enough!
- 5) No, wait, I can’t put it down. My next move will be No 47% -> 50%. The extra three points should go mostly to Low which is 4x as large as High. Watch:
Not perfect, but this time it’s good enough.
The end result is I have the following shares (use Forecast or Quick Forecast to see):
High: 77 “No” shares.
Low: 129 “Yes” shares
No: 163 “Yes” shares.
- October 20, 2020
Charles Twardy
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This research is supported (in part) by the Fetzer Franklin Fund of the John E. Fetzer Memorial Trust. It uses a platform developed for DARPA SCORE, and some staff are supported by SCORE while working on this. We are grateful for their support.
