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OpenAI fires an employee for prediction market insider trading

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Re: OpenAI fires an employee for prediction market insider trading

#121

Post by jacksnipe »

tgsovlerkhgsel wrote: post #99
gtowey wrote: post #67

Earlier quoted context omitted.

The thing is you're still thinking of these insiders as someone who just got a juicy stock tip from a relative. The much more serious problem is when these insiders actually have their hands on the levers which decide the outcome. It's really no different than a mobster who bets a bunch on money on an unlikely outcome then threatens one side to throw the match. What possible economic benefit is there to society to al…

This is the entire idea behind the concept of "assassination markets" - "prediction" markets on assassinations that are just thinly veiled ways to crowdsource murders by taking bets that you expect to lose against an "insider" (the killer).

Futures contracts were a mistake, god damn

Re: OpenAI fires an employee for prediction market insider trading

#122

Post by juleiie »

logicchains wrote: post #38
juleiie wrote: post #32

Earlier quoted context omitted.

Yeah but someone has to give the money to the insider traders. Betting and insider gambling wouldn’t work if people were educated and just didn’t gamble and so never used these platforms in the first place. It’s an old question of whether government is responsible to protect people from themselves or should we give everyone freedom to go bankrupt in this specific way if they so desire. I don’t know if there is a heal…

>I don’t know if there is a healthy way to gamble really. The majority of gamblers keep it within limits, only a small minority lack that control and inevitably end up impoverishing themselves.

The majority of people can’t even control their daily screen time, yet we are supposed to believe they can masterfully restrain their urges when money and dopamine are on the line? Nothing I’ve seen indicates human impulse control is that bulletproof. Furthermore, the 'I have it under control' narrative isn't proof of a healthy habit; it’s practically the universal slogan of active addiction.

Re: OpenAI fires an employee for prediction market insider trading

#123

Post by slg »

parpfish wrote: post #119
tgsovlerkhgsel wrote: post #99

Earlier quoted context omitted.

This is the entire idea behind the concept of "assassination markets" - "prediction" markets on assassinations that are just thinly veiled ways to crowdsource murders by taking bets that you expect to lose against an "insider" (the killer).

It doesn’t need to be as high stakes as assassination. Any public figure could have a free-money loophole with all the stupid bets on things like whether a certain word would appear in a speech. If I were famous I could start a pool betting on whether I would post a picture of a my lunch this week. I could stake whichever side has the biggest payout and then just make it happen

And we already have laws against this stuff when it is traditional gambling. For example, a couple MLB players[1] are currently facing 65 years in prison because they would occasionally waste a pitch at the directions of gamblers netting them a few thousand dollars each time they did it. For those not familiar with baseball, a starting pitcher generally throws between 80-100 pitches a game and a reliever throws roughly 10-30. This is basically as low stakes as a sports bet can get, so it makes it all the more attractive to attempt because it feels less like a compromising of morals with the less the participant actually needs to sacrifice.

These prediction markets are now giving even more people the opportunity to make a small ethical compromise in exchange for non-trivial amounts of money without any of the potential legal repercussions of traditional markets or gambling. That type of ubiquitous corrupting influence can't be good for the health of society.

[1] - https://www.cbssports.com/mlb/news/guardians-closer-emmanuel...

Re: OpenAI fires an employee for prediction market insider trading

#124

Post by victorbjorklund »

tyre wrote: post #72
holmesworcester wrote: post #50

Earlier quoted context omitted.

Isn't insider trading on a prediction market only wrong to the extent the insider is violating some duty of secrecy to the company? And isn't that just between them and their company in a case-by-case sense? If there was some valuable-to-the-public information that the company did not care about keeping private but just hadn't bothered to make public, for whatever reason, and an insider traded on it on a prediction m…

> Isn't insider trading on a prediction market only wrong to the extent the insider is violating some duty of secrecy to the company? Yes. Prediction markets, for corruption reasons, are regulated by the CFTC. In commodities markets, actors are assumed to be making trades based on propriety information. Hedging is the whole purpose! > …like it's a stock market where there is some society-level interest in giving part…

>> If a company accidentally leaves a press release for a merger publicly available, I happen to guess the URL, and then I trade on it: Unfair (I have access to insider information that other market participants do not) but legal!

Not necessarily. Just because you accidentally left your S3 bucket open and I brute force my way to the link by guessing doesn’t make it legal. It can still be insider information. Insider information is not limited to people who have a duty to the company. If I break into the companies office and steal information and trade on it then it can be insider trading.

Re: OpenAI fires an employee for prediction market insider trading

#126

Post by MarceliusK »

holmesworcester wrote: post #50
gtowey wrote: post #28

Earlier quoted context omitted.

Insider trading is the raison d'etre of these products.

Isn't insider trading on a prediction market only wrong to the extent the insider is violating some duty of secrecy to the company? And isn't that just between them and their company in a case-by-case sense? If there was some valuable-to-the-public information that the company did not care about keeping private but just hadn't bothered to make public, for whatever reason, and an insider traded on it on a prediction m…

In theory maybe, but in practice companies almost always do care about keeping things like release timing, product status or leadership decisions confidential. Even if they haven't publicly announced a policy about prediction markets specifically, it's usually covered under general confidentiality and acceptable use policies

Re: OpenAI fires an employee for prediction market insider trading

#127

Post by MarceliusK »

gtowey wrote: post #67
holmesworcester wrote: post #50

Earlier quoted context omitted.

Isn't insider trading on a prediction market only wrong to the extent the insider is violating some duty of secrecy to the company? And isn't that just between them and their company in a case-by-case sense? If there was some valuable-to-the-public information that the company did not care about keeping private but just hadn't bothered to make public, for whatever reason, and an insider traded on it on a prediction m…

The thing is you're still thinking of these insiders as someone who just got a juicy stock tip from a relative. The much more serious problem is when these insiders actually have their hands on the levers which decide the outcome. It's really no different than a mobster who bets a bunch on money on an unlikely outcome then threatens one side to throw the match. What possible economic benefit is there to society to al…

I think this is mixing up two different things: influence and knowledge

Re: OpenAI fires an employee for prediction market insider trading

#128

Post by MarceliusK »

cjonas wrote: post #5

Insider trading is so trivial on the prediction markets. I'd guess that it's actually the "feature" that results in the outcomes being so accurate.

Prediction markets are probably most "accurate" when at least some participants have genuinely superior information

Re: OpenAI fires an employee for prediction market insider trading

#129

Post by MarceliusK »

xrd wrote: post #3

A fun aside: this person obviously created a bunch of new Bitcoin accounts to hide their activity. It makes you think that if you were able to surreptitiously add malicious side channel software into a popular npm package that you wouldn't just need to hunt for crypto wallets with balances. You could also probably find a market for crypto wallets with small balances or zero balances. The history and date of creation…

What investigators often look for isn't just wallet age, but funding patterns, timing, and linkages between wallets

Re: OpenAI fires an employee for prediction market insider trading

#130

Post by tossaway0 »

vkou wrote: post #97
holmesworcester wrote: post #50

Earlier quoted context omitted.

Isn't insider trading on a prediction market only wrong to the extent the insider is violating some duty of secrecy to the company? And isn't that just between them and their company in a case-by-case sense? If there was some valuable-to-the-public information that the company did not care about keeping private but just hadn't bothered to make public, for whatever reason, and an insider traded on it on a prediction m…

The insider has perverse incentives as an employee.

I’m probably overlooking something, but if you have insider info, you just bet on that info with certainty. Why would you need to create a different outcome to bet on it?

If I know my company is going to do something on March 16th, I can bet against it happening until that day, and then bet big it will happen that day. I don’t need to influence the company to change what it’s going to do to make money on it.

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