Some while a go, we could read the following message on Augur website which reads:

Imagine an Early Warning System for everything that tapped into the collective awareness of humanity. Imagine better forecasts about politics, commerce, technology, entertainment and more.”

How exactly Augur can be used in politics? Can you give some examples?

The quoted text above specifically mentions "forecasts about politics". The best current example of political forecast prediction markets I know of is PredictIt, a research project run out of Victoria University in Wellington, NZ.

Augur improves on PredictIt (and other centralized prediction markets) in a number of ways:

  • the ability for users to create their own markets, e.g. if they want a forecast for something that's less mainstream
  • the lack of caps on investment in a given market (which affects accuracy)
  • the lack of a central authority (which affects the legality, as outlined in this answer)

Taken together these properties make political forecast markets on Augur both more diverse and more accurate, as well as more resilient to legal challenge.

  • Another improvement is global access to the market, whereas sites like PredictIt tend to not be global – Joey Krug Aug 20 '17 at 3:32

The idea with prediction markets and politics is that they can provide a better source of information than polls. Someone could create a market for "Who will win the 2016 US Presidential Election" and then anyone can place bets on who will win. The idea is that the the current trading price is representative of the probability for each candidate to win.

Augur supports markets with up to 8 outcomes, which means they can easily support an 8-candidate political election.

There have been some theories on Futurarchy where markets can predict the success of laws and use that prediction to drive lawmaking over time. The problem with this is that defining success metrics with a clear schelling point for legislation is really hard, so I don't see this happening soon.

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