Introduction to Augur, an open-source, decentralized betting marketplace

Post by bpicolo » Mon, Aug 20, 2018, 9:56 PM UTC

anoncoward111 wrote: post #112

hedgew wrote: post #7

Augur will probably be used for betting but really it's a prediction market. https://en.wikipedia.org/wiki/Prediction_market Prediction markets are an interesting tool for determining the most likely answer or result for almost any question. Some economists hope that we could use prediction markets to make difficult political decisions. Many companies already use them internally. Sadly there's only one prediction mar…

There is a much larger global prediction market that comes with its own set of nuances and quirks, and that of course is the stock market. You can even get involved with no fee at all through Robinhood, but you will have to fill out some annoying and potentially costly IRS forms. If I could paraphrase Charlie Munger, in the stock market, the only people who are successful long term are those who bet massive sums, ver…

Post by merinowool » Mon, Aug 20, 2018, 10:03 PM UTC

adam wrote: post #119

GreenPlastic wrote: post #89

Earlier quoted context omitted.

Yes, it works very well but not for the 'wisdom of the crowds' effect. It works because the people with the most information and best models sharpen up the price. Over time, the sharpest bettors grow their bankrolls or capital exponentially and place larger bets and have a disproportionate weight on the markets and their opinions matter more, making markets more efficient.

In theory you're right - but this isn't how it works in practice. The people who earn the most money are the best traders, not necessarily the people with the "most information and best models." The overall forecasts tend to be accurate, but you cannot look to individual participants, see who has the most money, and assume they know the most about the subject at hand.

Post by gcb0 » Mon, Aug 20, 2018, 10:26 PM UTC

hedgew wrote: post #7

Augur will probably be used for betting but really it's a prediction market. https://en.wikipedia.org/wiki/Prediction_market Prediction markets are an interesting tool for determining the most likely answer or result for almost any question. Some economists hope that we could use prediction markets to make difficult political decisions. Many companies already use them internally. Sadly there's only one prediction mar…

Post by ansiton » Mon, Aug 20, 2018, 10:30 PM UTC

gcb0 wrote: post #145

hedgew wrote: post #7

Augur will probably be used for betting but really it's a prediction market. https://en.wikipedia.org/wiki/Prediction_market Prediction markets are an interesting tool for determining the most likely answer or result for almost any question. Some economists hope that we could use prediction markets to make difficult political decisions. Many companies already use them internally. Sadly there's only one prediction mar…

prediction markets are not well regarded academically , outside of the cristall ball economics. the academic consensus is that as soon as you create a second incentive (the prediction market itself) you lose all the insight you could gain from external factors. At that point they are no better than simply looking at the stocks (the predicted market). hence prediction markets are by definition, useless. the cristall b…

Post by gcb0 » Mon, Aug 20, 2018, 10:32 PM UTC

ansiton wrote: post #147

gcb0 wrote: post #145

Earlier quoted context omitted.

prediction markets are not well regarded academically , outside of the cristall ball economics. the academic consensus is that as soon as you create a second incentive (the prediction market itself) you lose all the insight you could gain from external factors. At that point they are no better than simply looking at the stocks (the predicted market). hence prediction markets are by definition, useless. the cristall b…

Do you have citations for this? The academic papers I've read on prediction markets are (broadly) positive.