LessWrong (Curated & Popular) “Judgements: Merging Prediction & Evidence” by abramdemski
Mar 1, 2025
In this engaging discussion, abramdemski, an author well-versed in Bayesianism and radical probabilism, dives into the nuanced relationship between prediction and evidence. He explores how market dynamics reflect this interplay, shedding light on trading strategies influenced by both intrinsic and extrinsic values. The conversation also unpacks modern reasoning models in judgment and decision-making, contrasting them with traditional beliefs, and reveals how unlimited resources reshape trading behavior. A thought-provoking exploration for anyone curious about decision theory!
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Merging Prediction and Evidence
- Classical Bayesianism separates prediction (agent's probability) and evidence (environment's observation).
- Radical Probabilism views evidence as softer, pushing belief in a direction without being absolute (0% or 100%).
Prices as Prediction and Evidence
- Alice buying stock at price P is a prediction of future price increase.
- Selling to Bob at Q (>P) is evidence confirming the prediction, stronger with higher Q.
Traders as Judgments
- Traders, as per logical induction, are functions of prices to buy/sell actions, evolving strategies over time and using external evidence.
- They represent judgments, unifying prediction (using wits to predict prices) and evidence (ensuring market reflects truth).
