Opinion Markets

#Definition

An opinion market is a prediction market where the outcome is determined by subjective human judgment rather than an objective, verifiable event. Instead of resolving on "Did X happen?" the market resolves on "Will a panel/survey/judge determine that X happened?"

Examples include markets on "Will critics rate this movie above 80%?" or "Will experts judge AI progress to have reached milestone Y?" The resolution depends on human evaluation, introducing subjectivity that traditional prediction markets avoid.

#Why It Matters in Prediction Markets

Opinion markets expand the range of questions prediction markets can address. Many important forecasting questions lack objective resolution criteria:

Subjective outcomes

Questions like "Will this policy be considered successful?" or "Has this technology achieved human-level performance?" require judgment. Opinion markets provide a mechanism to trade on inherently subjective assessments.

Expert aggregation

Some markets use expert panels for resolution, aggregating specialist opinions. This can produce better resolution for technical questions where objective metrics are unavailable or misleading.

Reputational stakes

Opinion markets often predict what established authorities will say or decide. This includes critic ratings, award outcomes, regulatory judgments, and institutional assessments: all involving human opinion.

Challenges for traders

Trading opinion markets requires predicting human psychology and institutional behavior, not just underlying events. A movie might be objectively good but receive poor reviews due to cultural backlash; traders must anticipate the reviewers' response, not just the film's quality.

#Fact Markets vs. Opinion Markets

#How It Works

#Resolution Mechanisms

Opinion markets specify how subjective judgments will be collected and translated into market resolution:

Survey-based resolution

A defined survey instrument is administered to a specified population. The market resolves based on survey results.

Example: "Will more than 50% of economists in the IGM Forum survey agree that minimum wage increases reduce employment?"

Panel judgment

A designated panel of experts evaluates the outcome. The market resolves based on panel consensus or majority vote.

Example: "Will the Nobel Prize committee award the Physics prize for quantum computing by 2030?"

Platform Examples: Opinions.fun and Fact Machine are notable platforms specializing in opinion markets. These platforms focus on subjective beliefs, social sentiment, and collective judgment: enabling traders to speculate on outcomes determined by human opinion rather than objective events.

Single authority

One designated judge or institution makes the determination.

Example: "Will the Supreme Court rule in favor of the plaintiff?" (The Court's opinion is subjective but authoritative)

Aggregated ratings

External rating systems provide resolution.

Example: "Will the film's Rotten Tomatoes score exceed 75%?" (Aggregated critic opinions)

#Numerical Example

A market asks: "Will experts judge GPT-5 to have achieved 'human-level' reasoning?"

Resolution criteria: A survey of 100 AI researchers; market resolves Yes if 60%+ answer affirmatively.

A trader believes:

• 70% chance GPT-5 will genuinely demonstrate strong reasoning
• But only 50% chance researchers will agree it's "human-level" (due to definitional disagreements)

#The Subjectivity Spectrum

The trader's estimate for the opinion market is 50%, not 70%. They might sell Yes at $0.55, betting that researchers won't call it human-level even if the capability exists.

Expected Value (selling Yes at $0.55) = 0.50 × $0.55 + 0.50 × (-$0.45) = $0.05

/**
 * Calculates a weighted opinion score.
 * 
 * @param opinions - Array of opinion objects { score: number, weight: number }
 * @returns Weighted average score
 */
function calculateWeightedOpinion(opinions) {
  let totalScore = 0;
  let totalWeight = 0;
  
  for (const op of opinions) {
    totalScore += op.score * op.weight;
    totalWeight += op.weight;
  }
  
  if (totalWeight === 0) return 0;
  return totalScore / totalWeight;
}

// Example: Expert (wt 3) says 80, Novice (wt 1) says 50
// ((80*3) + (50*1)) / 4 = 290 / 4 = 72.5

#Examples

#Example 1: Movie Critic Predictions

A market predicts: "Will the upcoming film receive over 80% on Rotten Tomatoes?"

Traders analyze:

• Film's creative team track record
• Early buzz and festival reception
• Critic demographics and preferences
• Potential cultural/political factors affecting reviews

The market is predicting critical opinion, not objective film quality. A technically excellent but controversial film might trade lower than its craft would suggest.

#Example 2: Economic Expert Surveys

A market asks: "Will the IGM Forum economists' survey show majority agreement that cryptocurrency is primarily used for speculation?"

Traders must predict:

• How economists interpret survey wording
• Current academic consensus
• Whether recent events have shifted expert opinion
• The specific economists likely to respond

#Example 3: Award Predictions

Markets on Oscar winners, Nobel Prizes, or similar awards are opinion markets: resolution depends on committee decisions reflecting subjective judgment.

A trader predicting the Best Picture Oscar analyzes:

• Academy voter demographics and preferences
• Campaign spending and strategy
• Industry politics and narratives
• Historical voting patterns

#Example 4: Regulatory Judgments

A market on "Will the FDA approve drug X?" is partially an opinion market. While approval nominally depends on evidence, FDA panels exercise judgment in interpreting data, weighing risks, and applying standards.

Traders must predict not just efficacy data but how the agency will evaluate it.

#Risks, Pitfalls, and Misunderstandings

Confusing opinion with reality

The most common mistake is trading based on what you think should be true rather than what judges will say. A movie you consider excellent might receive poor reviews; your task is predicting reviews, not quality.

Panel selection uncertainty

If the judging panel isn't fixed in advance, resolution becomes harder to predict. Expert consensus varies significantly by which experts are asked.

Definition ambiguity

Subjective criteria like "human-level AI" or "policy success" are interpreted differently by different judges. Markets may resolve in ways that seem inconsistent with common understanding.

Manipulation through influence

Opinion markets can theoretically be manipulated by influencing the judges. A trader might lobby critics, fund academic research, or shape narratives to move opinions in their favor.

Correlation with underlying events

Opinion markets often correlate with objective outcomes but aren't identical. A drug might work (objective) but not get approved (opinion); a candidate might lose badly but still be considered "successful" by partisan judges.

#Practical Tips for Traders

• Study the judges, not just the subject: Know who will decide the outcome. Research their past judgments, biases, and methodological preferences

• Distinguish capability from recognition: In technology or performance markets, the underlying achievement may precede official recognition. Trade on when recognition will occur, not when capability exists

• Watch for narrative shifts: Subjective judgments are influenced by prevailing narratives. Anticipate how stories about the subject are evolving

• Consider survey wording carefully: Small changes in question framing dramatically affect survey results. Read the exact resolution criteria

• Account for strategic behavior by subjects: If the subject of judgment knows about the market (e.g., film studios aware of Rotten Tomatoes predictions), they may alter behavior to influence the outcome

• Discount overconfidence in expert consensus: Expert opinion markets often show excessive certainty. Experts disagree more than consensus markets suggest

#Subjectivity Risk

Opinion markets are inherently riskier because they rely on human judgment rather than hard data.

• Disputes: Traders often argue over whether a tweet was "positive" or "negative."
• Resolution: Often requires a "jury" or committee to decide, which introduces human bias and delay.

Always check who decides the outcome before trading.

#Related Terms

• Prediction Market
• Resolution Source
• Resolution Criteria
• Mention Markets
• Decision Markets
• Information Aggregation
• Opinions.fun
• Fact Machine

#FAQ

#How are opinion markets different from regular prediction markets?

Regular prediction markets resolve on objective, verifiable events (Did X happen? What was the value of Y?). Opinion markets resolve on subjective human judgments about those events (Will critics say X was good? Will experts agree Y meets threshold Z?). The distinction matters because objective truth and expert/public opinion can diverge.

#Can opinion markets be manipulated?

Yes, potentially more easily than objective markets. Since resolution depends on human judgment, anyone who can influence the judges can affect market outcomes. This might involve lobbying, information campaigns, or strategic timing. However, manipulation still requires resources, and opposing traders provide some check.

#Why would platforms offer opinion markets?

Many important questions lack objective resolution criteria. Questions about quality, success, achievement thresholds, and future consensus require human judgment to resolve. Opinion markets expand prediction markets to these important domains while providing clear (if subjective) resolution mechanisms.

#Are opinion markets less accurate than objective prediction markets?

Not necessarily less accurate, but they measure different things. An opinion market accurately predicting "75% of critics will approve" is different from accurately predicting "the film is good." Opinion markets can be well-calibrated to the opinions they predict while diverging from underlying reality.

#How should I approach trading opinion markets differently?

Focus on predicting the judges' behavior rather than your own assessment of the underlying question. Research who the judges are, their historical patterns, and factors that influence their opinions. Be prepared for outcomes that seem "wrong" by your judgment but are correct predictions of others' judgments.