Prediction market thinking: when probability replaces fear, we can truly be free.

Original Title: When a Father Uses Prediction Markets to Alleviate Parenting Anxiety

Original author: Polyfactual

Source:

Reprint: Daisy, Mars Finance

Last Tuesday morning, I stood in the pickup line at elementary school, with my hand resting on my son's backpack, frozen in place. Just this past weekend, another school shooting had dominated the headlines.

When he excitedly ran into the school building, I felt that familiar tightness in my chest—a heart-wrenching feeling, as if anything could happen as they gradually became more independent in this hostile world.

On the way to work by car, I played an audiobook I was listening to: “Say Nothing,” a historical account of the Northern Ireland conflict – a thirty-year period of anti-colonial violence from 1969 to the late 1990s, during which 186 children were killed.

Northern Ireland was truly a war zone at certain times, with streets filled with explosions, gunfire, and military presence. The book details the plight of those innocent victims, with the most haunting being the children who were accidentally harmed or even killed. However, when you actually calculate the data, you find that during that entire terrifying period, the risk of a child being killed was about 1.2 out of every 100,000 children per year.

Participating in prediction markets has activated the analytical part of my brain, helping me tackle problems that once seemed unsolvable. I analyzed the data on school shootings in the United States.

Currently, the annual risk of K-12 students dying from school shootings is about 0.06 per 100,000 students. My son—who will be attending public school in 2025—faces a statistical risk lower than that of children attending school in Belfast in 1975. In other words, during the Northern Ireland conflict, a child was 20 times more likely to be violently killed than today’s American students are to die from school shootings.

This awareness does not make school shootings any less tragic. Each shooting is an absolute disaster and a failure of society to protect children. But it has had an unexpected effect: it has allowed me to let my son live freely.

Anxiety Trap

Regarding parenting issues in the information age, there’s one thing no one tells you: your brain is fundamentally bad at assessing risk. Our brains are wired to respond to vivid, emotional threats—those accompanied by breaking news alerts and the constant barrage of tragic events on Twitter/X. However, we are not good at properly weighing these threats against underlying probabilities and statistical likelihoods.

This is precisely where the role of prediction market thinking lies.

Prediction markets operate by aggregating information from multiple sources and forcing individuals to place real bets on their beliefs. They excel at cutting through noise, as they penalize emotional reasoning and reward accuracy.

You cannot maintain a position in the prediction market based solely on your feelings; you need to think from the perspective of actual probabilities and put aside emotions. I'm not suggesting that we all become cold and unfeeling calculating machines regarding children's safety issues.

What I suggest is to adopt a framework of probabilistic thinking—this psychological model that allows prediction markets to operate effectively—can become a true tool for improving life.

Deconstruct probability

After sending the kids to school that morning, I started applying this framework of thinking to more anxieties. Not to deny them, but to bring them back to a reasonable size.

I drive more frequently than the average person, so I looked up the relevant data: the annual risk of Americans dying in car accidents is about 12 out of every 100,000 people. This is indeed one of the leading causes of death, and the risk is clearly significant. However, there is one thing I hadn't considered before: when I adjusted my mindset to be a focused driver who doesn't live stream on TikTok while driving, my personal risk significantly decreased.

There are more factors: I don't drink and drive, I always fasten my seatbelt strictly, I don't text while driving, and my car is equipped with modern safety features that my parents' generation never had. Each factor further reduces the risk.

By analyzing the data, I realized that while driving does carry risks, my specific risk situation is far lower than what the news suggests. More importantly, it helped me clarify what really matters: those behavioral factors that I can control. I cannot eliminate risk entirely, but I can approach it with caution.

The mindset of the prediction market raises a key question: What should I really focus on among all the available information?

Decision-making under uncertainty

This way of thinking is especially powerful in major life decisions. Should we move for job opportunities? Should our child skip a grade? Should I try experimental ketamine treatment?

Traditional advice is to list pros and cons or “go with your gut.” But prediction market thinking offers a more structured approach: estimating the probabilities of different outcomes, assigning rough values to these outcomes, and then looking at the recommendations from the expected value calculations.

When my wife considered switching to a lower-paying job that might be more fulfilling, we found ourselves in a dilemma.

Then we begin to break it down step by step:

⇨ What is the probability that she becomes happier? (We estimate it to be 70%)

⇨ How happy will she become? Measured on a scale that we can roughly quantify.

⇨ What is the probability of financial pressure causing serious problems? (We estimate it to be 20%) • How severe will these problems be?

Just through this analysis process, even without reaching a final conclusion, we have clearly clarified our thoughts. We realized that we have overemphasized financial risks because they are very concrete, while underestimating the factor of satisfaction because it is more abstract.

My prediction market thinking forces us to clarify our assumptions. We made changes, which can indeed be difficult at times, but it is the right choice.

Limitations of the framework

I need to clarify one point: this is not about simplifying life into an electronic spreadsheet. However, many struggles in life can be seen as exaggerated threats or opportunities that we overlook due to our miscalibration of risk.

Probabilistic thinking does not mean indifference or calculation; it means being honest about what we actually know and what we fear. It means distinguishing between “this feels scary” and “this is actually dangerous.”

daily life prediction market

The actual situation is as follows:

Before making a decision: Don’t ask “What should I do?” Instead, ask “What are the possible outcomes? What is the probability of each outcome?” Write them down and assign rough percentages. You may find where your thinking is not clear enough.

When feeling anxious: Ask yourself what evidence would change your assessment. If there is no evidence that would change it (for example, whether the risk is 0.001% or 10%, you are equally worried), then what you are facing is not calibrated worry, but rather a broad anxiety that needs to be addressed with a different approach.

On the recurring worries: Record them. I started to note down the specific situations I worried about regarding my child. A week later, I found that none of those vivid scenarios I worried about actually happened, but some things I never worried about did occur (like getting injured on the playground, or a new behavioral issue I hadn't anticipated). This didn't make me stop worrying completely, but it did allow me to see the world more objectively.

When conflicts arise with a partner: instead of arguing whether something is “too dangerous” or “completely safe,” assign it a number. For example: what are the outcomes of clinical ketamine treatment? How many people in the study group had bad experiences, and how many experienced complete psychological rebirth and relief from mental health issues? Collect the data and then make a decision.

Living in distribution

The deepest insight gained from this way of thinking is not about any single decision, but rather accepting that we live in a probabilistic universe. James Clerk Maxwell once said, “The true logic of the world is in the calculation of probabilities.”

Bad things will happen, and good things will happen. Most things will fall somewhere in between. You cannot achieve zero risk through optimization, and trying to do so may cause you to miss out on the full texture of life.

When I think of my parents during the Northern Ireland conflict, who sent their children to school every day despite the real violence around them, I don't think they were being negligent. They made a rational choice: life must go on, and the alternative—locking children at home out of fear—is a different form of tragedy.

The thinking provided by the prediction market ultimately offers not certainty, but clarity. Not fearlessness, but targeted concern. Not the elimination of risk, but the wise distinction of which dangers should change our behavior and which should not.

I still feel worried when I send my son to school, perhaps I always will. But now, when my chest starts to tighten, I can pause and ask myself: Is this fear proportional to the actual risk, or is my brain doing what it usually does—catastrophizing, looking for threats, trying to protect what I love most?

Usually the latter. And I am slowly learning to let him walk into the school gate easily while also making my mood a little lighter.