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

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

#71

Post by kurtis_reed »

enjeyw wrote: post #58
kurtis_reed wrote: post #48

Earlier quoted context omitted.

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.

Proper scoring rules measure accuracy

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

#72

Post by kelnos »

elil17 wrote: post #14

How long before the government intentionally does something stupid so that a Prediction Market pays off? Probably won't happen actually, since they can just do blatant insider trading on the stock market instead.

The money involved in prediction markets at present isn't enough for governments to bother. $436k is a nice windfall for your average individual, but that's peanuts for anyone at a level to influence government actions.

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

#73

Post by kelnos »

mothballed wrote: post #56
paxys wrote: post #43

Earlier quoted context omitted.

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 leas…

> 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're the president's son, ~$400k is probably not worth your time.

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

#75

Post by 3eb7988a1663 »

bulbar wrote: post #63
paxys wrote: post #43

Earlier quoted context omitted.

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

I believe there are way better opportunities than making 400k with a bet on an app. Could have been for fun though.

There are so many obvious grifts happening inside the administrations, $400k hardly seems worth the effort for the top dogs.

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

#76

Post by kelnos »

paulpauper wrote: post #6

It's technically not illegal if someone was able to observe the planes flying and place the bets accordingly. Public info is legal to trade on. But it's obviously also ripe for abuse. Any govt. employee can start trading on the side, 100% untraceable.

It's not illegal, period, because this isn't a regulated security. Prediction markets don't fall under these laws; in fact, insider trading is seen as a feature of these markets.

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

#77

Post by kelnos »

giarc wrote: post #60
tptacek wrote: post #53

Earlier quoted context omitted.

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 market…

> you are also aggregating non-insider information

You're not really aggregating non-insider information, because in these cases, it's not really "information", it's just (at best) rational guessing or (at worst) gambling.

But yes, Kalshi and Polymarket essentially aggregate gambling, rational guesses, and insider information that's likely to be correct. It's a losing game unless you're an insider, and these companies profit off of other people's addictions.

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

#78

Post by jjmarr »

enjeyw wrote: post #40
biophysboy wrote: post #21

How often are these prediction markets "correct"? Has this been studied?

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…

Charlie Kirk has a 3% chance of winning a Nobel Peace Prize right now according to Polymarket. He's climbed from 1% since Maduro was arrested.

It seems unlikely since Nobels aren't awarded posthumously.

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

#79

Post by stingraycharles »

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

Noob question from me: what’s the difference between accuracy and calibration? A well calibrated market would be more accurate and vice versa, not?

Edit: just found the answer myself: “accuracy measures the percentage of correct predictions out of total predictions, while calibration assesses whether a prediction market's assigned probabilities align with the actual observed frequency of those outcomes”

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

#80

Post by meowkit »

ordinaryradical wrote: post #70
tshaddox wrote: post #7

Earlier quoted context omitted.

To be fair, insider trading for a prediction market doesn’t really seem like a bad thing. It’s arguably the entire point (to incentivize the aggregation of all relevant information on the topic) and, unlike securities markets, there’s no equivalent of “but it’s unfair to normal traders using the markets as investments.”

The problem with prediction markets is not purely insiders but that they interface with the real world, so they encourage bettors not just to predict an outcome but to bring it into being. You are a poorly paid Russian commander. You open an account on polymarket or Kalshi and place a bet about specific Russian troop movements, perhaps ones that would be disastrous to your war effort even, to up the leverage. When yo…

Your example assumes there would be sufficient liquidity on that bet. The existing platforms aren’t houses or market makers that just provide functionally infinite liquidity on any bets. The “win” criteria on this example is so specific that verification becomes its own problem.

In theory a fun example, but practically it doesn’t play out the way you’re describing.

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