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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

#171

Post by predictthis »

bjackman wrote: post #99
kqr wrote: post #96

Earlier quoted context omitted.

Well, better synthesis of public information is also a way to win. Some people think of that as more fair. Another way to win is to use them for hedging exposure elsewhere. That also doesn't require inside information.

Why should we want prediction markets to be fair? I want them to reveal facts about the world. They only need to be fair inasmuch as it serves that goal. I don't think it wouldn serve that goal to forbid insider trading? (Why do we forbid insider trading in the stock market? Not because it's unfair. Because it makes the market worse at doing what we want it to do, which is funding the most productive enterprises).

[dead]

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

#172

Post by scoofy »

bjackman wrote: post #126
scoofy wrote: post #113

Earlier quoted context omitted.

>Why should we want prediction markets to be fair? I want them to reveal facts about the world. I do not think this is a reasonable position. The problem is that predicting "real facts about the world" creates a situation where you could take out an place a sizable bet on your neighbors house burning down. Allowing prediction markets is, thusly, inherently problematic. Allowing them to be anonymized with insider info…

You can say you don't want prediction markets and that's fine. It's not responding to my comment though which is saying that if we have prediction markets, the goal should be for them to reveal facts about the world. If you think prediction or stock markets should be "fair" then you have a very bizarre definition of fair (one that's compatible with a game that only rich people can win). Also desiring "fairness" impli…

> It's not responding to my comment though which is saying that if we have prediction markets, the goal should be for them to reveal facts about the world.

My point is you can’t have this without creating a massive incentive for people to create events, and it’s inherently easier to create disorder, which hurts everyone in a free society.

> pointing to one possible case of misuse and then leaping to "inherently problematic" is pretty weak IMO.

This is like saying nuclear weapons are “one possible case of misuse of nuclear technology.” Yes, obviously, but it’s serious enough to justify massive regulation of nuclear technology.

I’m not saying prediction markets should be illegal. I’m saying that they should have a very small maximum wager, require public disclosure of who is taking which bets, and it should not pay out if the actor has any connection to agents that create the change in the world.

Sports gamblers have known about how problematic this concern is forever. Organized crime used predictions markets they could influence (sports betting) as a major source of revenue throughout history.

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

#173

Post by UncleMeat »

bjackman wrote: post #99
kqr wrote: post #96

Earlier quoted context omitted.

Well, better synthesis of public information is also a way to win. Some people think of that as more fair. Another way to win is to use them for hedging exposure elsewhere. That also doesn't require inside information.

Why should we want prediction markets to be fair? I want them to reveal facts about the world. They only need to be fair inasmuch as it serves that goal. I don't think it wouldn serve that goal to forbid insider trading? (Why do we forbid insider trading in the stock market? Not because it's unfair. Because it makes the market worse at doing what we want it to do, which is funding the most productive enterprises).

> I want them to reveal facts about the world.

What facts were revealed here?

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

#174

Post by mtlmtlmtlmtl »

bjackman wrote: post #99
kqr wrote: post #96

Earlier quoted context omitted.

Well, better synthesis of public information is also a way to win. Some people think of that as more fair. Another way to win is to use them for hedging exposure elsewhere. That also doesn't require inside information.

Why should we want prediction markets to be fair? I want them to reveal facts about the world. They only need to be fair inasmuch as it serves that goal. I don't think it wouldn serve that goal to forbid insider trading? (Why do we forbid insider trading in the stock market? Not because it's unfair. Because it makes the market worse at doing what we want it to do, which is funding the most productive enterprises).

The only "facts about the world" revealed by prediction markets are facts about what people betting in prediction markets believe. Which I guess is interesting in itself if you're a sociologist. Otherwise, not so much.

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

#175

Post by UncleMeat »

ralph84 wrote: post #88
exogeny wrote: post #11

Insider trading is a feature, not a bug, say Shayne and Tarek, stupidly. You can't have this amount of obvious manipulation and expect the average retail consumer to join. Same reason why there hasn't been mass consumer adoption of crypto. People just don't feel safe.

Even without insider trading it's a negative-sum game. Every dollar won is a dollar lost, and the platform takes a cut. Like all negative-sum games you should only participate if it's purely for entertainment or you have a clearly definable edge over the other players. If you can't spot the sucker, you are the sucker.

People like to gamble. I expect that the vast majority of interaction with these systems is seen by participants as gambling. "Who will win the presidential election" and "who will win the jets game" are similar kinds of questions. Both are negative sum.

And people do get upset and feel cheated when the bet isn't "fair." We just saw a big scandal where various athletes are changing their behavior in order to enable their buddies to win big in sports betting.

I really don't think that "well, we should just educate people about the fact that prediction markets are actually battlefields of insider information and their purpose is not to enable gambling on the future but instead to give society some model of future outcomes" is going to stick.

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

#176

Post by UncleMeat »

tptacek wrote: post #23
giarc wrote: post #19

Earlier quoted context omitted.

How? Then why would non-insiders bet? The classic prediction market is guessing the weight of an elephant (or some animal) at a circus. The average guess of the crowd will actually get very close. But if someone knows the actual weight, no one would play.

The entire idea of a prediction market is to aggregate insider information. If you don't have insiders, you're not doing predictions, you're just doing gambling. Granted: that's what almost every Polymarket user is actually doing. But that's a bad thing . The insider whales are the only ones actually using it for its intended purpose.

As a philosophical idea, yes. In practice something else is happening. The purpose of a thing is what it does.

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

#177

Post by 1vuio0pswjnm7 »

Silicon Valley and other so-called "tech" commpanies, along with "tech journalists" and other online commentators (prognosticators) who presumably work for such companies, are a never-ending source of "predictions" (promises) that never hold true

One longstanding example is "vapourware", but the deception carried out today goes even further, IMHO

What if the non-believers and realists could use "prediction markets", in addition to short selling, to bet against them

Maybe they are already doing so, but I have not seen any examples

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

#178

Post by scoofy »

sparky_z wrote: post #135
jen20 wrote: post #130

Earlier quoted context omitted.

They aren’t predicting anything if the result is known a priori. Words matter - “prediction markets” just smooths over grift by making it sound reasonable.

The result was not, and could never have been, known a priori. All sorts of random things could have gone wrong with the operation causing the raid to fail and Maduro to remain in power. Trump could have just randomly changed his mind, or postponed the raid to beyond the end of January (the cutoff for the betting market). The person placing the bet was still taking a chance, but it was an informed chance that shifted…

> The result was not, and could never have been, known a priori.

This is a level of solipsism not worth discussing.

Yes, Superman could be a real person and we all had our minds altered to think he’s a superhero.

Yes, when someone pulls the trigger of a gun pointed at someone’s head, it could misfire and explode in their hand.

The point is that someone influencing prediction markets can push this probability to very, very near zero. So much so, as to make the outcome effectively certain for all intents and purposes.

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

#179

Post by numtel »

randyrand wrote: post #93

Using insider information is how you are supposed to win these. Otherwise it's just random gambling. This is not the stock market. There are no public reporting rules for the weather, song lyrics, what Kim Kardashian eats tomorrow.

Getting close to Jim Bell's assassination politics

https://news.ycombinator.com/item?id=32790951

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

#180

Post by dzhiurgis »

pseudo0 wrote: post #134
jjmarr wrote: post #78

Earlier quoted context omitted.

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.

The issue there is time. The Nobel prizes will be announced in around 9 months. Buying a share of "No" would currently cost 98.2 cents, working out to a (basically) risk-free return of around 2.4%. Alternatively someone who wants a very low-risk investment product could just buy 1-year t-bills with a return of... ~3.5%. And that doesn't require messing around with buying crypto and the inherent risk of trusting Polym…

Are t-bills accessible for anyone, especially loaded with crypto?

AFAIK there are coins that pay better (some give you exposure to t-bills).

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