I'm kind of surprised the article doesn't spell out why these are "prediction markets". They're prediction markets because it used to be that what they were doing was illegal. It was illegal to just set up a gambling website in the US and so these "prediction markets" were the same thing as crypto, masking what was really happening behind some tech speak. In the same way that in the crypto market you regularly get be…
The top markets: Polymarkets and Kalshi are regulated and in US jurisdiction, so your whole analysis is wrong.
Regulation without enforcement is no regulation at all.
This was discussed on polymarket with the Galve Goat burning bet and assume it's why Essentially it's a big straw goat in Sweden that vandals sometime set on fire. Right towards the end as the probability approaches zero there's a huge profit incentive, "done deals" usually go under well under 1¢ meaning 100-200x returns. A US man once traveled to Sweden to set the goat on fire, he was caught, fined $20k(?) and then…
I think as this becomes a reality, in general people will stop trading so close near the deadline for so little gain.
As it gets closer to the deadline, the timeframe shortens, so the gain does increase. A 1% return which you're paid on tomorrow is a 3,778% annualized return.
I think it's actually not that hard to get right (or at least "right enough"), as evidenced by the fact that markets have successfully run the entire global economy for thousands of years with no central oversight and almost no regulation. Markets failures do happen, and when they do it can be helpful to have an external force step in to nudge the market back onto the rails. But even without such interventions they w…
> markets have successfully run the entire global economy for thousands of years Markets, as they are understood today, are more like about 300 years old, even less in some places. The bulk of world economy has been sustenance farming for most of the human history, with some communal mutual help (based on favours and mutual indebtedness) thrown in. > with no central oversight and almost no regulation Lol what? E.g. R…
The industrial revolution multiplied the size of the global economy by several orders of magnitude, but it didn't create it. International trade has been happening on a smaller scale since large-scale civilized society existed. And I said "almost no regulation", not "no regulation". Probably something on the order of 99% of the regulations we have today wouldn't have even been feasible to enforce a couple hundred years ago, yet markets still functioned just fine on the whole.
Do you know of any studies that can accurately show the correlation between gambling and societal costs? On the surface the link makes sense to me and seems like it should be right, though I'm not sure how we could have tested it in a controlled way to really know the link exists.
This is such a weird question, just go outside and interact with humans and the evidence is everywhere
> Scamming of gambling addicts is tragic but not detrimental to society. I used to believe that. With the legalization of all the sports betting and how fast it can drain a gambler which can then affect the gambler's family, I'm now pretty much on the other side of the fence. Just like we banned public smoking because of the effects of secondhand smoke, I'm pretty convinced that the secondary effects of gambling mean…
The sports betting sites even have account managers who are tasked with keeping people on the sites even after the user has decided to quit. It’s so lucrative they can afford to pay people to sit and text gambling addicts.
This is common practice in gambling and now games, too: Zynga has 'VIP' teams for high-spending free to play game customers, they would talk on the phone at length, get to know them, fly them to Vegas for jaunts, etc.
https://www.gamesindustry.biz/how-does-zynga-hunt-for-whales...
> "We've done so much experimenting at Zynga with VIP. We know what's the frequency of contact. We know what call types work. We know what times to call. We know exactly who to call and when. We know who has a higher propensity to be more susceptible to our call."
Comparing crusty old stock markets to the mass appeal of shiny, low-barrier-to-entry Polymarket is somewhat naive.
Polymarket is way higher barrier to entry than the stock market. For starters you need to sent ETH over the Polygon network. Stock market is in dollars.
I don't think Polymarket even allows US people yet, but Kalshi you can fund with a credit card even.
Prediction markets to me are a natural consequence of the post-truth world we live in. For one, it creates insanely imbalanced systems where two sides of a 50/50 market have completely opposite world views that when the market resolves may have access to sources, whether completely fake or misinfo'd, that lead them to believe the market should be settled in their favor. This then puts the prediction market in a place…
If those prediction markets can be used as an alternative way to put resources into "reporting" then it could be valuable. The downfall of journalism has been preceded by the loss in economics from newspapers with M&As causing cultural inbreeding.
Stock markets aren't too different in that they help predict which companies will be valuable in the future.
This is a problem, a net negative and a sign of a weakening society. But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe? It seems hard to be a climate change denier when you're about to gamble on it. Or maybe people will find a way to gamble while still living in completely different reality bubbles. Probably. If you thought your neighbor was politically extreme last elec…
But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe? Only in a truth-agnostic sense. Good gamblers in player-banked games (poker; rock, scissors, paper) vs house-banked games (slots) are good at figuring out what the other guy is representing. The actual truth is much less significant.
Well, assuming they're paid out truthfully, it does incentivize learning the actual truth. Unless you're saying that the oracles are falling for fake news? Or you're saying people are intentionally buying the wrong option, getting other people to believe it, and then selling before it becomes worthless? That seems harder than just buying the right option unless you already have a ton of influence to burn.