Prediction markets can tell the future. Why is the US so afraid of them?

Post by johnfn » Sat, Nov 11, 2023, 1:09 AM UTC

not2b wrote: post #18

johnfn wrote: post #4

Earlier quoted context omitted.

You can go look at the old Predictit market if you like - it's still around[1]. You can also check election betting odds[2]. Clinton hovered around 60-80 in the week or two before the election. Even if it were 90%, I'm not sure that's an indictment of prediction markets. A probability of 90% means that 10% of the time, the other thing happens. It's a bit like saying "wow, it's cold today; I guess global warming isn't…

We have no way of exploring the multiverse or running the same election more than once, so there isn't any evidence that the payout from a prediction market matches the probability of something happening. It's just collecting the predictions of people who are willing to bet money, weighted by how much they spend, and calling that the prediction. I don't think rich people are necessarily better than not-so-rich people…

Post by johnfn » Sat, Nov 11, 2023, 1:10 AM UTC

nitwit005 wrote: post #12

johnfn wrote: post #9

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In theory the same thing is true with horse race betting; you can just assassinate the horse. Or the jockey. Or if you want to be more subtle about it, just slip something into the horse feed. But this doesn't really happen in practice.

A quick Google search shows a number of accusations of poisoning horses: https://www.espn.com/moresports/news/2003/0709/1578661.html https://www.telegraph.co.uk/news/2019/06/21/dressage-poisoni... Plus apparently a huge amount of drugs given to their own horses trying to cheat.

Post by WalterBright » Sat, Nov 11, 2023, 1:20 AM UTC

arcticbull wrote: post #22

johnfn wrote: post #16

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OK, fair; a stronger argument is "it doesn't happen enough that we need to shut down horse racing". Or tennis betting, in your case.

It's a question of scale. A few horses aren't a big deal, and both sides (the horse racing, and the bet) are heavily constrained in scope. Both sides become far less constrained with prediction markets. Maybe if we were objective, horse betting should be shut down -- but we kinda don't care.

Post by johnfn » Sat, Nov 11, 2023, 1:21 AM UTC

blibble wrote: post #24

johnfn wrote: post #19

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Same response I gave the other guy - you can go look up the market here rather than conjecturing [1]. It was about 25% the day before. In any case, it seems very silly to discount prediction markets because the probability didn't work the way you expected it to in a single event. The whole point of probability is that it's probabilistic! [1]: https://www.predictit.org/markets/detail/1413/Will-the-UK-vo...

> In any case, it seems very silly to discount prediction markets because the probability didn't work the way you expected it to in a single event. prediction markets participants are idiots with no underlying knowledge betting according to their bias they are no different to the "markets" created at the dog track

Post by johnfn » Sat, Nov 11, 2023, 1:24 AM UTC

aidenn0 wrote: post #15

johnfn wrote: post #4

Earlier quoted context omitted.

You can go look at the old Predictit market if you like - it's still around[1]. You can also check election betting odds[2]. Clinton hovered around 60-80 in the week or two before the election. Even if it were 90%, I'm not sure that's an indictment of prediction markets. A probability of 90% means that 10% of the time, the other thing happens. It's a bit like saying "wow, it's cold today; I guess global warming isn't…

#3 makes it look like things predicted as "very likely not" (10-20%) and "very likely so" (80-90%) tend to be biased towards the contrarian view. Does Metaculus have limits that make it unprofitable to make bets things that would push them outside the window? Anecdotally I've seen quotes from prediction marktets that show a surprisingly high chance for things that are incredibly improbable (to the point that I would…