221–230 of 263 posts
Earlier quoted context omitted.
Nobody is required to participate in these markets.
Nobody is required to use hacks in competitive multiplayer video games. You may choose to play fairly and be beaten over and over again. If there are no consequences for the cheaters, it becomes essentially mandatory, and that's without there being money on the line.
Earlier quoted context omitted.
> Insider trading is unethical It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information. Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the…
I completely agree with you. The only thing I would add is, that prediction markets are not necessarily oracles for predicting the future. They can just as well be used for hedging: imagine, hypothetically I really do not want Trump to win. I can bet on Trump, not because I want or expect him to win, but to hedge my position (perhaps my business would suffer if Trump wins)
Earlier quoted context omitted.
Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.
You can't just "work on that". Insurance works on repeatable, predictable risks based on models. You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
Why can’t the markets just forbid transactions that happen within 48 hours of resolution?
What does that solve? Wouldn't the insiders in e.g. the Iran War just have to place their bets 3 days before?
It certainly wouldn't perfectly solve things but the further out a prediction is made the more risk there is that the outcome could change - even for someone with insider knowledge.
E.g. I've worked in businesses where an M&A has looked a nail on cert - as part of a small discreet team involved we were being readied for the announcement etc. only for it to stumble a few days before completion.
Obviously there are some markets/situations where a few extra days won't make a difference at all, but I could see how something like that would introduce more risk/uncertainty for those with insider knowledge.
You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.
And this is the whole point. Prediction markets are supposed to be providing the most accurate predictions. The most accurate predictions come from insider information. Poeple complaining about insider trading on prediction markets seem to be missing the point. They're supposed to have insider trading. That's the whole idea.
Earlier quoted context omitted.
> Insider trading is unethical It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information. Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the…
What a bunch of fluff. The problem is that prediction markets are excellent vehicles for corruption as demonstrated by the article discussed here. You're arguing that corruption is a good thing.
The fact remains that prediction markets and financial markets are not the same thing. Bets between people happened all the time, and you would wager based on information asymmetry, that is the whole point of it.
By making these markets public facing, you get access to this information asymmetry, whereas before it was behind doors, and these bets were already taking place, you just didn't know it, now you do.
Earlier quoted context omitted.
What is unethical? The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone. Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do th…
"Information" is not neutrally reflective of some objective, deterministic reality. Processes involving information are slippery and reflexive, and that's the danger people are all but shouting for you to see. The feedback loops have extreme potential. The danger isn't in "exposing information" it's in people coercing reality to fit their bet. Peoples' lives are on the line. The wild thing is that prediction market d…
Let's start of with something simple. Should a single wager between two people be illegal, should sports betting at all be legal? Is it only illegal if one or more entities facilitate the bet?
Earlier quoted context omitted.
As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you. Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.
Yes, but the examples where it's good has a name "insurance". It exists, it's generally well regulated, and is not easily exploited. The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.
So you are renaming something that doesn't and won't ever exist.
Earlier quoted context omitted.
If this were the case, deeper and more informed pockets than yours would take the opposing position until there’s no more alpha to be had.
Not true at all. A great example was this market from the most recent primary election. https://kalshi.com/markets/kxtxsenatedemturnout/voter-turnou... Based on just simple math there was basically no chance of turnout being over 2.5m and yet the market for multiple days had the higher buckets at exorbitant prices.