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Prediction markets have an elections problem

asteriskmag.com

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Re: Prediction markets have an elections problem

#191

Post by ummonk »

caf wrote: post #159
ummonk wrote: post #109

The article briefly mentions causes for market inefficiency such as the time value of money and platform fees, but then inexplicably goes on to ignore them as potential reasons for inefficient markets. Plenty of arbitrage opportunities exist on PredictIt that can’t be taken advantage of either because the platform’s cut of any profit you make on a bet will negate the arbitrage or because resolution is so far off that…

That is not how I read it at all. To me, it reads as "there are likely many reasons these markets aren't operating efficiently". The time value of money and fees certainly are part of it, but they don't explain things like, for example, the weight of money in the Trump-by-280+-EV contract.

The point (which the author misses) is that irrational actors (such as those putting money in Trump winning by 280+) wouldn't significantly distort market odds if the market weren't severely crippled by so many restrictions and fees.

Re: Prediction markets have an elections problem

#192

Post by immibis »

kmeisthax wrote: post #48
iouwhldkfjgklj wrote: post #46

Earlier quoted context omitted.

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.

People with subject knowledge can make money, but no mechanism guarantees that the majority of people using the market are subject matter experts. If anything, most people using the prediction market are going to be people paying to make their chosen outcome look more preferable. They aren't trying to make a financial payoff on the bet, they're trying to make an emotional payoff and are willing to lose money doing so…

So bet the correct way and make the financial payoff those people won't. What's the problem?

Re: Prediction markets have an elections problem

#193

Post by baobabKoodaa »

dataflow wrote: post #175
baobabKoodaa wrote: post #171

Earlier quoted context omitted.

If it was really as clear and obvious as you claim, then please explain while the exchange felt the need to add a very visible disclaimer explaining the terms?

"It" as in the actual title they used? It was damn clear, it didn't need any clarification aside from the data source and the starting point of the measurement. "It" as in their intended title? It obviously didn't match what they wrote, hence the "clarification". Not particularly different from how politicians frequently "clarify" that by X they actually mean not-X... Riddle me this: imagine your convince your spouse…

I think I misread your comment as meaning the literal opposite of what you meant.

Re: Prediction markets have an elections problem

#194

Post by laidoffamazon »

nostromo wrote: post #107
laidoffamazon wrote: post #22

Earlier quoted context omitted.

This is, again, a conspiratorial mindset considering Michelle Obama has repeatedly said she would never run and Kamala Harris would never be replaced.

Politicians always say that. Obama himself denied wanting to run for president repeatedly right up until he announced his run for president.

Notably Barack Obama was an actual politician in February 2007, unlike Michelle Obama. It's a nonsensical comparison.

Re: Prediction markets have an elections problem

#195

Post by ssharp »

jfoutz wrote: post #117
bluedays wrote: post #110

Earlier quoted context omitted.

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

Can't speak from personal experience, but OP laid it out pretty clearly. You wait till you have an edge, then you bet. There are various books that try to capture it. Doyle Brunson's super system is like way outdated, but there are some funny bits about being a Texas road gambler getting run out of town. Annie Duke has a book I believe. My window into that world is pretty narrowly focused on poker. I'll always recomm…

Another big aspect of professional gambling is actually being able to place bets once you have an edge. This is obviously not an issue in poker but is in most other games:

The casino will ban you if you count cards in blackjack.

The sportsbooks will limit your action or ban you if the figure out you have an edge (or just see that you're winning or betting in certain patterns).

Re: Prediction markets have an elections problem

#196

Post by mattmaroon »

bluedays wrote: post #110
mattmaroon wrote: post #67

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many ment…

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

I mostly played poker, where you can have an advantage over other players that is greater than the rake the casino takes. But I also found all sorts of random opportunities here and there where I had an edge. Where a casino comp system gives you more in rewards than the game takes from you for instance. (That’s both common and legal but they will cut you off because you are essentially taking the comps they want to go to the people they make more off of so it’s a lot harder to make a lot at than it used to be.)

Or when an online casino is not careful enough about how you earn the bonuses they give you. Things of that nature. There are people also who can do it at things like horse, racing or sports betting, but I never knew enough about either of those or wanted to learn.

My Predictit wagering has mostly been on the theory that exactly what this article says is true: people are betting who they like and the polling aggregators are better. I really just look for arbitrage opportunities or discrepancies between the market and 538 that are large enough to overcome the fees.

The fees are high enough to make it not happen a ton, but it does happen.

Re: Prediction markets have an elections problem

#197

Post by mattmaroon »

yieldcrv wrote: post #131
defen wrote: post #118

Earlier quoted context omitted.

The IRS has various rules in place that determine whether gambling is your business / profession. If you qualify as a professional gambler, you can deduct losses against your winnings (just like casual gamblers can) but you can also deduct your "business expenses" (e.g. cost of travel, hotels, meals, etc that you spend in pursuit of your business).

2017 tax reform took all of that away for gamblers. they are on as equal footing as casual gamblers, at least for when net losses exist, there are no more NOLs to carry forward (or back) which is what made that status the most useful https://www.journalofaccountancy.com/issues/2018/oct/pro-gam... but some deductions maybe yeah

I did not know that! That was well after the decade where I qualified.

Re: Prediction markets have an elections problem

#198

Post by mattmaroon »

Geezus_42 wrote: post #113
bluedays wrote: post #110

Earlier quoted context omitted.

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

Pretty sure it's a joking way of saying they used to be a day trader.

Haha it was not. While I goofed around with that in the late 90’s/early aughts I never believed it was a long-term profession and never really won or lost much at it.

Re: Prediction markets have an elections problem

#199

Post by mattmaroon »

perrygeo wrote: post #116
mattmaroon wrote: post #67

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many ment…

> I managed to get to bet on something that had already happened But you're not. You're betting on whether the contract will settle and when. That's quite distinct from betting on the event itself.

I guess the people on and other side of the wager would have agreed with you. I don’t know what odds there were of the election being overturned but I am sure they are much smaller than the odds those people were laying on it happening.

Re: Prediction markets have an elections problem

#200

Post by quickthrower2 »

somenameforme wrote: post #151
quickthrower2 wrote: post #137

Earlier quoted context omitted.

The most open information is about poker. See the forums. Many of the concepts there apply to other sports. The idea that you don’t know if you are any good until you played 10000 hands etc. Trying to make money off lots of little edges. In a sport you probably need to model every game very well, use AI/ML (mostly linear regression though). Honestly it is boring frustrating work IMO.

10,000 hands in poker is nowhere even close enough to get a significant sample, unless you're playing extremely weak players where you just have a girnomous edge. But those sort of games are very uncommon. There were plenty of instances of strong, winning players going through swings that lasted hundreds of thousands of hands. A more reasonable baseline sample would be ~500,000 hands. Frustrating is definitely a grea…

You are probably right. I could have misremembered the number of hands, the main point is it is alot more than most think. One to ten games of soccer is enough to tell roughly how good someone is, by comparison.
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