A prediction market user made $436k betting on Maduro's downfall • Hacker News Board

Re: A prediction market user made $436k betting on Maduro's downfall

#51

Post by schoen » Tue, Jan 06, 2026, 4:58 AM UTC

tptacek wrote: post #44

schoen wrote: post #41

Earlier quoted context omitted.

Well, it's confusing because you have markets on questions with very different characteristics in terms of whether they are exogenous or not (and whether they are exogenous from the perspective of particular groups), or just with different degrees of asymmetry regardless of whether there are literal "insiders". Like, prediction markets have questions ranging from what the weather will be in a certain year, to who wil…

Yeah, I mean, they're a wretched hive of scum and villainy, I preemptively agree. I'm just saying, insider bets don't have the same ethical or legal valence on a prediction market that they do in the financial markets (even there, at least in the US, the principles underlying insider trading law are really poorly understood.)

It's funny to think that the most villainous markets might be some of the humorous prop bets where the person creating the market (or a friend of the person creating the market) literally completely controls the outcome. Like "will I say SOME_WEIRD_WORD on stage at the conference tomorrow?".

Although maybe the villainy would come in more from deceiving people about whether or not an event was under your control, more than merely encouraging people to bet on an event that was clearly and unambiguously under your control.

Re: A prediction market user made $436k betting on Maduro's downfall

#52

Post by schoen » Tue, Jan 06, 2026, 4:58 AM UTC

tptacek wrote: post #47

schoen wrote: post #45

Earlier quoted context omitted.

As I said in a parallel comment, Hanson was also thinking about scientific questions, where there are asymmetries in knowledge but people can often invest in research that improves their own knowledge (like by performing an experiment or a scientific expedition or something). So, Hanson believed that prediction markets could incentivize people to invest in scientific research in order to get an edge over other market…

He wrote a whole paper on this. https://mason.gmu.edu/~rhanson/insiderbet.pdf

Thanks, I forgot about that one. I've read some of his other writing on this subject and I didn't remember this paper.

Re: A prediction market user made $436k betting on Maduro's downfall

#53

Post by tptacek » Tue, Jan 06, 2026, 4:58 AM UTC

giarc wrote: post #49

tptacek wrote: post #38

Earlier quoted context omitted.

I think you should probably read more about the background of prediction markets. Robin Hanson is a useful place to start. The whole concept of a prediction market is to convert private information into prices . That only works with "insider" information.

I don't know much, but I can't see why betting on a known outcome is good? Why not just ask the knower? Also, just because Robin Hanson says "it's about aggregating insider information" makes it true. He writes some stuff.....

The idea is that people have all sorts of fragmentary information about future events that they can't directly reveal, due to confidentiality or trade obligations (among other things), and that a prediction market effectively liberates the directional content of that information by converting it into prices.

Robin Hanson can credibly claim to have invented prediction markets as we understand them today.

Re: A prediction market user made $436k betting on Maduro's downfall

#54

Post by tptacek » Tue, Jan 06, 2026, 4:59 AM UTC

schoen wrote: post #52

tptacek wrote: post #47

Earlier quoted context omitted.

He wrote a whole paper on this. https://mason.gmu.edu/~rhanson/insiderbet.pdf

Thanks, I forgot about that one. I've read some of his other writing on this subject and I didn't remember this paper.

It's OK, I didn't have it in cache either, I just remembered "people like Robin Hanson have said insider trading on prediction markets is a feature not a bug" and GPT5 tracked it down for me. :)

Re: A prediction market user made $436k betting on Maduro's downfall

#55

Post by tptacek » Tue, Jan 06, 2026, 5:00 AM UTC

schoen wrote: post #51

tptacek wrote: post #44

Earlier quoted context omitted.

Yeah, I mean, they're a wretched hive of scum and villainy, I preemptively agree. I'm just saying, insider bets don't have the same ethical or legal valence on a prediction market that they do in the financial markets (even there, at least in the US, the principles underlying insider trading law are really poorly understood.)

It's funny to think that the most villainous markets might be some of the humorous prop bets where the person creating the market (or a friend of the person creating the market) literally completely controls the outcome. Like "will I say SOME_WEIRD_WORD on stage at the conference tomorrow?". Although maybe the villainy would come in more from deceiving people about whether or not an event was under your control, more…

I agree that is funny and want to take this opportunity to say I think things like Polymarket are bad, a real corruption of the original idea. I'm not sticking up for them!

Re: A prediction market user made $436k betting on Maduro's downfall

#56

Post by mothballed » Tue, Jan 06, 2026, 5:02 AM UTC

paxys wrote: post #43

mothballed wrote: post #36

Earlier quoted context omitted.

It's my understanding a couple news agencies knew before everyone else but held off publishing. Seems like a good opportunity for nephew of someone in the media if not directly one of an official. https://www.thewrap.com/media-platforms/journalism/nyt-wapo-...

Let's not forget > Donald Trump Jr, the president's son, serves in advisory roles at Kalshi and Polymarket.

Absolutely possible but if you were the presidents son I do think you'd be more likely to slowly buy in over 1+ weeks. If you were media related you'd want to do a giant bet before anybody else as you know lots of other people know and it's only a matter of time when someone else exploits it, and you only know slightly ahead of time.

When you have insider information it's typically most profitable or at the very least less risky to exploit it at the earliest moment, but if you know you have a long head start you can do it slowly to keep from bidding up the price. In either case a giant bet only hour before tells me it's someone who only found out about the operation shortly before it happened.

------- re: below due to throttling ----------

(1) Is an excellent point but they bought "will happen in the month of January" for something that occurred at the beginning of January, so basically the worst case scenario for exploiting bet expiry.

(2) Makes sense on face but I had read elsewhere there was a 2 week window. So at no point would it go outside the January window of the bet, there was no point in waiting once January 1st hit.

In this case a rational insider with a priori knowledge far ahead of time would have either placed a large bet first thing January 1st or started to ease in first thing on January 1st, as waiting would convey ~no advantage and only present risk other insiders would bite the apple first.

Re: A prediction market user made $436k betting on Maduro's downfall

#57

Post by schoen » Tue, Jan 06, 2026, 5:02 AM UTC

tptacek wrote: post #55

schoen wrote: post #51

Earlier quoted context omitted.

It's funny to think that the most villainous markets might be some of the humorous prop bets where the person creating the market (or a friend of the person creating the market) literally completely controls the outcome. Like "will I say SOME_WEIRD_WORD on stage at the conference tomorrow?". Although maybe the villainy would come in more from deceiving people about whether or not an event was under your control, more…

I agree that is funny and want to take this opportunity to say I think things like Polymarket are bad, a real corruption of the original idea. I'm not sticking up for them!

What uses or structures of prediction markets would you like to see? For things like Polymarket, are you more particularly concerned about the kinds of participants (e.g. people who really are just gambling for entertainment), or about the kinds of questions that are the subjects of contracts?

Re: A prediction market user made $436k betting on Maduro's downfall

#58

Post by enjeyw » Tue, Jan 06, 2026, 5:03 AM UTC

kurtis_reed wrote: post #48

enjeyw wrote: post #40

Earlier quoted context omitted.

It absolutely has been! In general prediction markets can’t be “correct” or “incorrect” - for instance if a prediction market says there’s a 60% chance of an event occurring, and it doesn’t occur, was the market right or wrong? Well it’s hard to say - certainly the market said the event was more likely to occur than not, but only just, and who knows? Maybe the event _only just_ occurred, and very nearly didn’t! So ge…

No, markets are evaluated on accuracy, not calibration

Well markets are evaluated on a number of different metrics depending on what you’re trying to determine.

If you want to go be pedantic about it and select one metric, markets are evaluated on their Brier Score or some other Proper Scoring Rule, not accuracy.

However, I prefer calibration as a high level way to explain prediction market performance to people, as it’s more intuitive.

Re: A prediction market user made $436k betting on Maduro's downfall

#59

Post by tptacek » Tue, Jan 06, 2026, 5:05 AM UTC

schoen wrote: post #57

tptacek wrote: post #55

Earlier quoted context omitted.

I agree that is funny and want to take this opportunity to say I think things like Polymarket are bad, a real corruption of the original idea. I'm not sticking up for them!

What uses or structures of prediction markets would you like to see? For things like Polymarket, are you more particularly concerned about the kinds of participants (e.g. people who really are just gambling for entertainment), or about the kinds of questions that are the subjects of contracts?

The original prediction markets were internal things at large companies, which I think are a great idea. I've flirted for a long time with doing a vulnerability prediction market. The good-faith incarnations of prediction markets aren't open to all comers; they're structured so you can't meaningfully gamble on them.

Re: A prediction market user made $436k betting on Maduro's downfall

#60

Post by giarc » Tue, Jan 06, 2026, 5:08 AM UTC

tptacek wrote: post #53

giarc wrote: post #49

Earlier quoted context omitted.

I don't know much, but I can't see why betting on a known outcome is good? Why not just ask the knower? Also, just because Robin Hanson says "it's about aggregating insider information" makes it true. He writes some stuff.....

The idea is that people have all sorts of fragmentary information about future events that they can't directly reveal, due to confidentiality or trade obligations (among other things), and that a prediction market effectively liberates the directional content of that information by converting it into prices. Robin Hanson can credibly claim to have invented prediction markets as we understand them today.

"that a prediction market effectively liberates the directional content of that information by converting it into prices."

I can see this, and I guess maybe my issue is with the phrasing of "aggregating" insider information. Because you aren't just aggregating insider info, you are also aggregating non-insider information, but no one (but the insider) knows what is right.

Is there different types of prediction markets then? One where there is a true insider and one without? For example, you could take bets on weather it will rain on Saturday. People can make educated guesses, but no one really knows (no insider). On the flip side, Kanye could create a bet on whether he will run for president. He would be the only insider, so again, aggregating insider and non insider information.