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> I would assume 90% dudes with strong conservative leanings So that would be a good place to make money, and ultimately make these markets better at predicting.
It seems like there is a lot of resistance to these kinds of markets. Both in terms of bureaucratic restrictions, but also in terms of sentiment, including here on HN. It's not that people disagree with the market clearing price, and are motivated to take a position. It's that they don't want other people to converge on a prediction in this way, and want to ban it, or keep the stakes so small that the market doesn't…
I worked at a prediction market startup for a while. Even completely rational prediction markets generally have a structural problem with events with likelihoods close to 1.0 or 0.0. This leads to cases where conspiracy type events have much higher likelihoods than they should, leading people to assume the market has lost all rationality when actually it hasn't. For example, imagine if there's an event with a predict…
Is there academic research on this by any chance? Recently I've been wondering if there is a similar issue with VC funded of startups, where people overestimate the odds of a building 10B or 100B business (especially relative to a 1B or 100M business), causing them to pursue investments and strategies with lower expected value.
Is it actually possible to make money against these small odds predictions? If I look at this page, it has dems win by 215+ at 2 cents. https://www.predictit.org/markets/detail/8077/What-will-be-t... So I buy a "no" contract for 98 cents, and sell it for $1 in most of a year. Maybe someone who has used the platform can chime in, but the terms of service seem to suggest I don't get any interest on my contract money me…
It seems like there is a lot of resistance to these kinds of markets. Both in terms of bureaucratic restrictions, but also in terms of sentiment, including here on HN. It's not that people disagree with the market clearing price, and are motivated to take a position. It's that they don't want other people to converge on a prediction in this way, and want to ban it, or keep the stakes so small that the market doesn't…
PredictIt even used to have markets on, like, which SCOTUS justice would be the next to leave. People got paid when RBG died. That literally would've been this, if it weren't for the fact that the small investment limit kept the returns low. Realistically I don't think anybody was going to be committing assassinations just to make a thousand bucks.
The same things that keep prediction markets inaccurate keep them from causing bigger problems.
Prediction markets are stupid, fundamentally. If you have some deep subject knowledge to make a prediction, your bet will be drowned by others. Sure, you can make a buck from your prediction, but you won't get instantly rich, and you won't be able to make these kinds of bets consistently.
Prediction markets are stupid, fundamentally. If you have some deep subject knowledge to make a prediction, your bet will be drowned by others. Sure, you can make a buck from your prediction, but you won't get instantly rich, and you won't be able to make these kinds of bets consistently.
If you concede that people with subject knowledge can make money, that sounds to me the opposite of stupid. Sounds to that it's working as intended.
It would be nice to have a site like electionbettingodds.com but with intervals rather than point preditions. Given the betting odds it's possible to calculate upper and lower bounds on the probabilities. Ideally you would take into account the fees and the opportunity cost of having your money locked in the bet. The bounds would be the range in which it wouldn't be possible to make an expected profit by betting eith…
While I'd concede that "they're stupid" is probably the primary reason someone might go for the Michelle Obama bet, I can think of AT LEAST one other -- e.g, I'm insanely rich Tyler Perry, and I just like the idea of that being in the air?
I worked at a prediction market startup for a while. Even completely rational prediction markets generally have a structural problem with events with likelihoods close to 1.0 or 0.0. This leads to cases where conspiracy type events have much higher likelihoods than they should, leading people to assume the market has lost all rationality when actually it hasn't. For example, imagine if there's an event with a predict…
> Even completely rational prediction markets generally have a structural problem with events with likelihoods close to 1.0 or 0.0. This leads to cases where conspiracy type events have much higher likelihoods than they should, leading people to assume the market has lost all rationality when actually it hasn't. Is there academic research on this by any chance? Recently I've been wondering if there is a similar issue…
Read "Secrets of Sand Hill Road".
It's written by Scott Kupor - one of the Managing Partner at A16Z - and explains in depth how the VC model works.
It's also required reading if you want to interview at a VC fund, and highly recommended by other founders to learn how to better strategize when raising funds.
Secrets of Sand Hill Road, Monetizing Innovation, and Working Backwards are the only books you need to successfully understand how to raise and build a VC funded startup. The pricing strategy guide by I think Sequoia is also useful.