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

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

#161

Post by nyolfen »

cryptobeanbaby wrote: post #156
ansiton wrote: post #147

Earlier quoted context omitted.

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

To quote a prior Senate Minority Leader Tom Daschle on the floor of the Senate: "How long would it be before you saw traders investing in a way that would bring about the desired result?" As in, if one found a way to bet against your car remaining in tact and realized sabotaging your car was cost effective to manipulate their bet, then they reap the market pay out. Is this good? https://en.wikipedia.org/wiki/Informat…

this is the idea behind assassination markets

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

#162

Post by gammateam »

drdeca wrote: post #140
gammateam wrote: post #130

Earlier quoted context omitted.

the problem is the limited amount of money one can make off of a random market. makes it less appealing to some (or many) and less efficient in determining an outcome yes assassin markets and popular political events can now be traded in the US even if the Augur company gets sanctions, but for everything else this is an inefficient system.

Well, the money has to come from somewhere. In any case, someone has to be willing to take the other side of your bet, whether it is other participants or the people running the market/betting thing. I'm not sure what alternative you are considering to not have that problem, or what it would look like for something to not have that problem.

> I'm not sure what alternative you are considering to not have that problem, or what it would look like for something to not have that problem.

I gave two examples. One isn't in production yet so we'll see

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

#163

Post by dragonwriter »

sien wrote: post #160
dragonwriter wrote: post #155

Earlier quoted context omitted.

> What about a market about the winner of the next US presidential election? IIRC, those exist, were the focus of attention a few cycles back (because cherry picked just right they were arguably better than polling in the cycle preceding the attention), but as soon as media started paying attention to them, people started diverting money to them to manipulate the results, because there are plenty of people that care…

That's a big claim. What's the evidence for people putting in large amounts of money to influence betting on elections? Isn't it making a bit assumption that people vote in a certain way because they see things in prediction markets? Regular people are surely not checking odds on who is likely to win an election.

> What's the evidence for people putting in large amounts of money to influence betting on elections?

Going back and reviewing things it seems my memory was wrong: the risk of coordinated efforts of this type if the prediction markets became seen as strong bellwethers of electoral success was discussed in the wake of some isolated, apparently single-trader incidents that momentarily moved the prediction markets in 2004 and again in 2008, but there doesn't appear to have been any detected widespread manipulation.

> Isn't it making a bit assumption that people vote in a certain way because they see things in prediction markets?

No, there's a pretty strong well-known effect that media coverage of electoral momentum reinforces that momentum; it's not doing much changing cited as impacting enthusiasm and turnout.

> Regular people are surely not checking odds on who is likely to win an election.

People—especially the people who are reasonably likely to vote—to consume political news, including news relating to whatever the media sees as strong horserace indicators. For a few cycles startibg around 2000 that had started including prediction markets, though it seems to have faded the last couple cycles.

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

#164

Post by arisAlexis »

ulrikrasmussen wrote: post #70
IMTDb wrote: post #51

Earlier quoted context omitted.

In direct democracy, you vote for what you want to happen. In a prediction market you vote for what you think will happen. The whole point is that a sufficiently large and diverse groupe of people is better at predicting the future using those system than an individual. Being able to correctly predicting the future can lead to better decisions.

Isn't that going to turn into a voting system as soon as those predictions are used for making political decisions?

that's called futarchy

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

#165

Post by DennisP »

cryptobeanbaby wrote: post #154
DennisP wrote: post #95

Earlier quoted context omitted.

Solving that problem is pretty much Augur's claim to fame. It's a combination of outcome reports by randomly-selected REP holders, possible disputes by bettors who post a bond and trigger a larger group of REP holders, and (after several escalating rounds of that) a potential fork of the whole thing on the theory that the version of REP that reports the truth will have more market value. (I think in that case REP hol…

It looks like Augur has no way to validate the "REP holders" though? This means a sybil attack can be launched by anyone behind the Augur project (assuming they set aside large reserves of REP for themselves, how would anyone know?), or anyone who acquired thousands of ETH in the presale for $0.50USD, or anyone with excessive capital can attack any Augur "prediction" and manipulate the outcome in their favor. Augur e…

They make no attempt to validate individuals. The more REP you have, the more influence you have. It's not exactly a sybil attack since you can't add influence without cost.

I was about to say they do depend on a REP-weighted majority attempting to maximize the amount and value of the REP they hold. But that's not actually true since the forking mechanism lets a significant minority fork off in their own direction. This is the final backstop that (theoretically) prevents outcome manipulation by a majority REP holder; the general public can just switch to the fork that told the truth. On that fork, the liars will no longer hold REP.

This would be a big deal but it shouldn't happen often, since the credible threat helps dissuade liars in the first place; they'll lose money and fail anyway.

But I don't know what happens to the ETH at stake in this scenario.

(Btw it wasn't me downvoting, these are good questions. I'm not with Augur and don't even hold REP. Have an upvote.)

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

#166

Post by arisAlexis »

blanderman wrote: post #3

"In the summer of 2018, assassination markets became popular among bettors. If those markets are seen to incentivise people to take illegal action, Augur could be shut down completely."

I would like to bet if Buffet dies in the next 5 years because he is very old. That doesn't mean I want him killed or that someone would kill him. In fact we could diferentiate between natural causes or homicide.

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

#167

Post by DennisP »

CodesInChaos wrote: post #129
DennisP wrote: post #29

Earlier quoted context omitted.

I'm having a hard time seeing a way assassination markets are actually a good business model for assassins. If the prediction is tightly bounded (e.g. "Mr. X will be killed on Sept. 3, 2018") then you warn the victim. If the prediction is loosely bounded ("Mr. X will be killed within the next year") then the odds won't be nearly as good, since many non-assassins may bet in favor. The assassin will have to put up a la…

One possible way to implement this: Have on betting pool per person. When betting cryptographically commit to a time interval for predicted death time. After death bettors have limited time to reveal the time interval they bet on. Split pool among correct bets weighted by 1/interval-length. Making it easy to hire an assassin anonymously is why I find privacy preserving coins like zcash scary, despite valuing my priva…

Well crap that does seem to solve the problems I mentioned. I don't think that could be set up on Augur, but it could be implemented as a new contract.

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

#168

Post by DennisP »

lostctown wrote: post #57
DennisP wrote: post #29

Earlier quoted context omitted.

I'm having a hard time seeing a way assassination markets are actually a good business model for assassins. If the prediction is tightly bounded (e.g. "Mr. X will be killed on Sept. 3, 2018") then you warn the victim. If the prediction is loosely bounded ("Mr. X will be killed within the next year") then the odds won't be nearly as good, since many non-assassins may bet in favor. The assassin will have to put up a la…

Additionally, not all bets on a person's or persons' life will be made with malevolent intentions. A global non-profit can use prediction markets as an exotic form of donating. The donator takes the "bad" side of the market, and if the non-profit is successful at saving lives, or doing some other form of reportable good, they receive a payout from their bet. Now, if the non-profit pays its employees absurd salaries,…

An idea I had a while back was to set up bets on breakthrough technologies, where you can fund X-Prizes by betting against them. The original X-Prize essentially did this by buying insurance against a payoff, which allowed them to significantly increase the prize amount; my idea was basically to crowdsource the insurance side of that.

https://www.climatecolab.org/contests/2015/shifting-attitude...

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

#169

Post by stcredzero »

modeless wrote: post #152
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…

The stock market is already a prediction market. Using a prediction market to predict a prediction market is a silly idea. But that doesn't make prediction markets bad at other things, like predicting the weather.

The stock market is already a prediction market. Using a prediction market to predict a prediction market is a silly idea.

If you have a prediction market on a prediction market, that mess reduces to a prediction market. Quelle surprise!

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

#170

Post by skolsuper »

skilgarriff wrote: post #158
gcb0 wrote: post #149

Earlier quoted context omitted.

you are probably reading crystal ball economists. do they also write about other means to pick stock besides analyzing the company?

Mind suggesting the economists to read, rather than just suggesting he is reading the wrong economists? I'm admittedly naive in this subject, but the name calling doesn't help. On the second point - there is solid evidence that, yes there are ways to pick stock besides JUST analyzing the company - see Momentum investing https://www.aqr.com/Insights/Research/Journal-Article/Fact-F... I've seen plenty of critics of the…

Maybe you're agreeing with GP? Analysing the companies would not be a profitable way of picking stocks in a genuinely Efficient Market.
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