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We haven't seen the worst of what gambling and prediction markets will do

derekthompson.org

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Re: We haven't seen the worst of what gambling and prediction markets will do

#571

Post by worldsayshi »

vovavili wrote: post #561
worldsayshi wrote: post #542

Earlier quoted context omitted.

I can't believe people are throwing so much money on zero/negative sum games that on average have no benefit to anyone including yourself. I mean I know gambling is a thing but at least we are counting that as an addiction. But we seem to take polymarket more seriously.

With proper constraints, there is a major positive externality in aggregating public and private information through market mechanisms. Robin Hanson wrote about this subject extensively. Dismissing it outright as a zero-sum game is a bit naive.

It also creates a lot incentives for creating unpredictable chaos as an insider.

Re: We haven't seen the worst of what gambling and prediction markets will do

#572

Post by michaelbuckbee »

Spacecosmonaut wrote: post #545
worldsayshi wrote: post #542

Earlier quoted context omitted.

I can't believe people are throwing so much money on zero/negative sum games that on average have no benefit to anyone including yourself. I mean I know gambling is a thing but at least we are counting that as an addiction. But we seem to take polymarket more seriously.

There is genuine value in a wisdom of the crowds assessment of future events that is only sharpened up by the requirement to put money on the line.

Genuinely asking: has there been a case of the prediction markets being "right" or valuable about something outside of the norm?

Re: We haven't seen the worst of what gambling and prediction markets will do

#573

Post by TFYS »

Spacecosmonaut wrote: post #545
worldsayshi wrote: post #542

Earlier quoted context omitted.

I can't believe people are throwing so much money on zero/negative sum games that on average have no benefit to anyone including yourself. I mean I know gambling is a thing but at least we are counting that as an addiction. But we seem to take polymarket more seriously.

There is genuine value in a wisdom of the crowds assessment of future events that is only sharpened up by the requirement to put money on the line.

There's value in that only if assessments made by people using the prediction for something aren't better than crowd wisdom. I would guess that a large part of prediction market participants are simple gamblers whose assessment is worse than the prediction of someone doing it because they need the information for something.

So if people who need predictions for decision-making start relying on prediction markets with a lot of low value gambler predictions and opinion manipulators (wealthy participants can use the platform to mislead people as well) the value of these things might be negative.

Re: We haven't seen the worst of what gambling and prediction markets will do

#574

Post by kranke155 »

YZF wrote: post #490

https://www.timesofisrael.com/liveblog_entry/court-idf-reser... This was just on the news: "A reservist suspected of using classified information to place bets on the Polymarket prediction site served as a major in the Israeli Air Force, a Tel Aviv Court reveals. The defendant was indicted alongside his alleged accomplice last month on severe security offenses, as well as bribery and obstruction of justice, after the…

This is the literally the only use of prediction markets in the real world - insider trading leaks information

Re: We haven't seen the worst of what gambling and prediction markets will do

#575

Post by doctaj »

well_ackshually wrote: post #552
worldsayshi wrote: post #542

Earlier quoted context omitted.

I can't believe people are throwing so much money on zero/negative sum games that on average have no benefit to anyone including yourself. I mean I know gambling is a thing but at least we are counting that as an addiction. But we seem to take polymarket more seriously.

There's three kinds of players on Polymarket & others * The insider trading ones that will never lose money * The wallstreetbets degenerates with enough money that it's a fun game even if you lose money * People that have seen every chance they have at becoming moderately wealthy disappear under the current economic state of their country, where overwhelming debt is likely. The era of making it wealthy from a job is…

Note that #1 will get kicked off the platform immediately. Even non-inside traders who win significantly more than expected will be kicked off. If you’re on the platform, you’re losing.

Re: We haven't seen the worst of what gambling and prediction markets will do

#576

Post by vovavili »

worldsayshi wrote: post #571
vovavili wrote: post #561

Earlier quoted context omitted.

With proper constraints, there is a major positive externality in aggregating public and private information through market mechanisms. Robin Hanson wrote about this subject extensively. Dismissing it outright as a zero-sum game is a bit naive.

It also creates a lot incentives for creating unpredictable chaos as an insider.

I explicitly accounted for this incentive with my first three words.

Re: We haven't seen the worst of what gambling and prediction markets will do

#577

Post by vovavili »

doctaj wrote: post #575
well_ackshually wrote: post #552

Earlier quoted context omitted.

There's three kinds of players on Polymarket & others * The insider trading ones that will never lose money * The wallstreetbets degenerates with enough money that it's a fun game even if you lose money * People that have seen every chance they have at becoming moderately wealthy disappear under the current economic state of their country, where overwhelming debt is likely. The era of making it wealthy from a job is…

Note that #1 will get kicked off the platform immediately. Even non-inside traders who win significantly more than expected will be kicked off. If you’re on the platform, you’re losing.

At the moment being, Polymarket has an enormous reputational incentive against behaving like a predatory gambling company. People rely on it as a kind of decentralized alternative to New York Times. Distorting this effect would be very short-sighted.

Re: We haven't seen the worst of what gambling and prediction markets will do

#578

Post by setsewerd »

doctaj wrote: post #575
well_ackshually wrote: post #552

Earlier quoted context omitted.

There's three kinds of players on Polymarket & others * The insider trading ones that will never lose money * The wallstreetbets degenerates with enough money that it's a fun game even if you lose money * People that have seen every chance they have at becoming moderately wealthy disappear under the current economic state of their country, where overwhelming debt is likely. The era of making it wealthy from a job is…

Note that #1 will get kicked off the platform immediately. Even non-inside traders who win significantly more than expected will be kicked off. If you’re on the platform, you’re losing.

That was my initial opinion, but more recently it's been established that there's quite a bit of a cat and mouse game here – people have come up with elaborate workarounds to avoid getting booted or limited by the platform, while the platforms come up with increasingly sophisticated monitoring to catch them before they win too much.

Though to your point I think these big winners are not representative of most users, who in my experience often think they're beating the system but in reality just don't log their losses very well. The house always wins etc etc.

Re: We haven't seen the worst of what gambling and prediction markets will do

#580

Post by meta_gunslinger »

super256 wrote: post #570
jappgar wrote: post #559

Earlier quoted context omitted.

It would be useful to predict things like earthquakes and tornados. Gambling on what politicians and celebrities will do is not science it's degenerate court gossip.

Game theory can be applied to these problem, and if you can correctly model reward, cost and motives, you can predict decisions of politicians more often than not.

> you can predict decisions of politicians more often than not

What makes you believe this? The performance of economist/sociology experts using game theory to make predictions has been worse than a coin-flip up to this point. It also has done enormous damage.

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