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Prediction markets are ushering in a world in which news becomes about gambling

theatlantic.com

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Re: Prediction markets are ushering in a world in which news becomes about gambling

#461

Post by arretevad »

alphazard wrote: post #435
arretevad wrote: post #429

Earlier quoted context omitted.

I think by your own definition the headline is warranted in its use of gambling. The act of betting on predictions is in service of “being right” ostensibly. But is really just about the monetary reward. I don’t see betting on predictions serving any other purpose. Other risks in life have other purpose, in which the risk is accepted because of the reward of the other purpose. Gambling is risk without any other sort…

It depends on the person making the bet. With sophisticated enough brain scanning technology, we could distinguish between "placing the bet to achieve a feeling" vs. "placing the bet because they believe it is mispriced". It's not possible for a 3rd party to, at a distance, determine why someone placed a bet in a prediction market. At a casino, it is possible. Most of the games are negative EV. So if someone plays an…

I guess I’m trying to say that in both cases you outline, the purpose of the act lies solely in the risk itself. Believing something is mispriced simply means the perceived risk is very low (or even negative) but the action is taken _because_ of the risk itself. No other purpose is served. Unlike other monetary instruments which could be consider stores of wealth. or other life decisions which have outside intrinsic values in which the risk is a consideration but not the primary object.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#462

Post by smarf »

butlike wrote: post #436
nkrisc wrote: post #322

Earlier quoted context omitted.

The gambling industry itself is a net drain on society. What is the societal benefit provided by it?

Entertainment. It's also the only vice you don't have to ingest an outside substance for.

> the only vice you don't have to ingest an outside substance for

to name a couple: gaming, prostitution (okay you might incidentally ingest an outside substance but YOU DON'T HAVE TO)

Re: Prediction markets are ushering in a world in which news becomes about gambling

#463

Post by wat10000 »

butlike wrote: post #437
nkrisc wrote: post #408

Earlier quoted context omitted.

Those things should really be illegal too, I think, even as someone who enjoys alcohol. The costs to society due to alcohol and the like are massive for essentially no real benefit. Yes, I know what happened during prohibition. That still doesn’t mean alcohol is good for society.

Alcohol is the only painkiller which can be infinitely self-administered. There's value in that. It's quite ancient, been proven to work, which is why it's probably stuck around so long.

What makes alcohol different from others? You can take any painkiller indefinitely until it kills you.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#464

Post by hamdingers »

banannaise wrote: post #452
hamdingers wrote: post #389

Earlier quoted context omitted.

The game is still won through the application of skill even if the house chooses not to play it with you.

The house isn't a player. They offer the game for players to play. That is a fundamentally different role. Saying that the house is playing the game against you is equivalent to saying that Nintendo is playing Super Mario Bros against you.

There is an entire category of casino games where the house is a player. These are called house-banked games and they include most of what you imagine when you think of a casino floor: blackjack, roulette, craps, slots, etc.

But even in player-banked games like poker, the house is an agent participating in the game through the dealer. They can still exercise their right to free association and not play with you.

A corrected analogy would be Nintendo banning you from Mario Kart Online for suspected cheating. Yes, Nintendo isn't playing, but they still have that authority as the facilitator.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#465

Post by jppope »

JohnMakin wrote: post #385

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…

> Prediction markets to me are a natural consequence of the post-truth world we live in

My best strategy for dealing with people who have been radicalized is to make wagers. Even making the wagers is hard because they are often about individuals who's job it is to gaslight their constituents... but its still been working pretty well. I'm up probably $1000 off of these little bets and they have helped me win later arguments.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#466

Post by suddenlybananas »

ToValueFunfetti wrote: post #381
tgsovlerkhgsel wrote: post #374

Earlier quoted context omitted.

There are some distinctions between gambling and prediction markets. For example, in prediction markets, some forms of insider trading are considered somewhat desirable - essentially, it monetizes insiders leaking inside information. Other forms of insider trading can be problematic: What if someone (could be an individual or even an uncoordinated group) bets millions of dollars on you not doing X, in the hopes of yo…

>What if someone (could be an individual or even an uncoordinated group) bets millions of dollars on you not doing X, in the hopes of you taking the opposite bet and doing X? If the market is efficient and aware of the bribery effect, others will bet that you will do X up to the point where the indirect bribe is equal to the cost of you doing X. If you have private knowledge that a bribe would be taken, you probably…

>If the market is efficient

If my grandmother had wheels she'd be a bike

Re: Prediction markets are ushering in a world in which news becomes about gambling

#467

Post by alphazard »

arretevad wrote: post #461
alphazard wrote: post #435

Earlier quoted context omitted.

It depends on the person making the bet. With sophisticated enough brain scanning technology, we could distinguish between "placing the bet to achieve a feeling" vs. "placing the bet because they believe it is mispriced". It's not possible for a 3rd party to, at a distance, determine why someone placed a bet in a prediction market. At a casino, it is possible. Most of the games are negative EV. So if someone plays an…

I guess I’m trying to say that in both cases you outline, the purpose of the act lies solely in the risk itself. Believing something is mispriced simply means the perceived risk is very low (or even negative) but the action is taken _because_ of the risk itself. No other purpose is served. Unlike other monetary instruments which could be consider stores of wealth. or other life decisions which have outside intrinsic…

> Believing something is mispriced simply means the perceived risk is very low (or even negative)

That's not what risk means. Risk is the amount you stand to lose, and expected value is the mean outcome (calculated by integrating across all possible outcomes). The EV can be positive or negative, and that corresponds to a mispriced asset. Risk can only go to zero, but it can also be arbitrarily high.

Managing risk is its own thing, but to give an intuition: How much should you bet on repeated fair coin tosses that pay out 3:1, if you have $100? More than 0, because it is positive EV, but definitely not the whole 100. Risk management is about playing vs. not playing and bet sizing.

Gambling is taking on risk without positive EV. A 1:1 cointoss is the quintessential example. EV is 0, you won't make or lose anything in the long run playing this game. But it adds uncertainty, you could have twice as much or nothing. Gambling is risk-seeking, the variance of outcomes has value (to a gambler) on its own.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#468

Post by KellyCriterion »

wat10000 wrote: post #459
KellyCriterion wrote: post #420

Earlier quoted context omitted.

In my country, lot of institutions running out-of-home-campaigns against gambling-addiction etc.; so yes, if public institutions are doing this then there is some evidence there

Must be nice to live in a country where you can make that inference.

EU country

Re: Prediction markets are ushering in a world in which news becomes about gambling

#469

Post by lenerdenator »

thecupisblue wrote: post #280

Not just America, everything is. With stock market, at least we can somehow stop the bad actors, insider traders, corporate manipulation, pumps and dumps - with prediction markets, there is no way. With prediction markets? Next to impossible. The markets being tied to crypto makes it even worse - things get harder to track, jurisdictions get blurry, proving becomes a ping pong between bureaucracy. And proving somethi…

To be fair, if you were aware enough to separate the characteristics of wealth and intelligence, you've probably seen the investing world as a casino with ego-stroking suits long before this. The difference between the cigarette-burning retiree surrendering their OASDI check at a casino in Kansas City and Wall Street investors is a diploma from the "right" schools and in the ability to sway the odds in their favor; they both can - and will - destroy themselves or those around them to indulge in their habit.

Any sort of announced intention to "somehow stop the bad actors" became laughable after 2008-2009. We had bankers and financiers kick the monetary legs out from under an entire generation and unless they did something blatantly illegal (read: were Bernie Madoff) none of them faced a consequence.

That's why you have the current situation in the US where scammers can take advantage of distrust in any and all of society's institutions, up to and including the federal government.

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