Good News Only Please
Corporate prediction markets have received a lot of press over the last few years, as an exciting new trend. But press coverage has a serious bias: it mostly only mentions success. Hundreds of companies have considered and rejected prediction markets, and many others have started them and then stopped, at least for a while. But news focuses on companies that are still trying them, and relatively happy.
I used to be quoted often in those articles, until my comments became a bit more negative – that didn’t fit the desired tone. I don’t blame reporters, I blame the readers; reporters understand that readers mainly want to hear breathless one-sided excitement about new technologies. Until they don’t; when over-the-top forecasts aren’t verified quickly, readers may want post-fad shaking-the-head "how could they all be so gullible" articles. After the dotcom bust, few wanted to hear about how the dotcom revolution really was continuing to remake society.
The important lesson: Biases that appear in the world we see via press coverage are often the biases readers expect to see, and insist on seeing.
Adrian,
But isn't Robin's point that we're biased to demand too little of such schadenfreude news? People want to hear a certain message--prediction markets represent powerful technological development, or offshoring is bad--and so restrict their demand for reports arguing the opposite. Yet people often complain that the media is too sensationalist, nativist, or even futurist. The market won't supply enough counter-biased reporting--does this observation support government intervention?
A common corrective, assuming the original story has legs, is a subsequent story by a different reporter debunking, or at least qualifying, the original. In the case of offshoring, the original stories focused on all the companies taking up offshoring. Now stories are appearing that gleefully focus on companies that tried it but have since retreated because of problems. Schadenfreude, pleasure at someone else's misfortune, may be a useful well-spring for counter-bias.