Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets.
Read the original papers on them.
http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf
Effort to prevent government officials from engaging in prediction markets
81–90 of 141 posts
Re: Effort to prevent government officials from engaging in prediction markets
#82Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read the original papers on them. http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf https://www.jstor.org/stable/3216893 https://mason.gmu.edu/~rhanson/insiderbet.pdf
True experts need not be the people with the ultimate ability to effect change. Professional sports organizations ban their players from betting on games because it creates bad incentives to throw a winnable game. Banning elected representatives from gambling on prediction markets doesn’t make it impossible for insider information to surface, but it does prevent the governance equivalent of match fixing.
Re: Effort to prevent government officials from engaging in prediction markets
#83Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read the original papers on them. http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf https://www.jstor.org/stable/3216893 https://mason.gmu.edu/~rhanson/insiderbet.pdf
EXACTLY! We want insiders to participate in prediction markets and profit!
Re: Effort to prevent government officials from engaging in prediction markets
#84All this focus on some insiders who made thousands on betting markets to distract from those who made billions on Wall Street or the oil markets this week.
Both should face consequences but only one will.
Re: Effort to prevent government officials from engaging in prediction markets
#85Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.
It's also low-ranking members of the armed forces that have a lot more information than you'd expect. If you just banned the high ranking members from prediction markets, I actually don't think very much would change. (There would just be slightly more delay.)
Very few armed forces members have enough information to make actual meaningful trades. The low ranking ones do not have enough money to make meaningful trades even if they did.
Re: Effort to prevent government officials from engaging in prediction markets
#86Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read the original papers on them. http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf https://www.jstor.org/stable/3216893 https://mason.gmu.edu/~rhanson/insiderbet.pdf
It might've been the original purpose but in practice prediction markets have turned into a tool for gambling.
It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?
Re: Effort to prevent government officials from engaging in prediction markets
#87Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.
> The Secretary of War
There's no such position. You may be referring to the Secretary of Defense.
Re: Effort to prevent government officials from engaging in prediction markets
#88The prediction market trend will "work itself out". It will become common knowledge that these platforms are exploited by insiders so people "trust" apparent flagged insider bets, so people will try to piggyback insiders, then it will be revealed that a sophisticated party with infinitely deep pockets burns massive amounts of cash to manipulate odds and these piggybackers will be burned badly, so in the end classical…
People give plenty of money to mobsters who are running illegal gambling operations (This used to be common in the US). Unsurprisingly, those mobsters cheat people, but they keep doing it.
Re: Effort to prevent government officials from engaging in prediction markets
#89Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.
> The Secretary of War There's no such position. You may be referring to the Secretary of Defense.
It’s a secondary title [1].
Re: Effort to prevent government officials from engaging in prediction markets
#90Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.
They do what they can. It won’t matter. But the point at this point is to call out the grift. To make plain for at least the rest of you outside our borders that America died of grifters squeezing dollars out of some weird machine that we couldn’t or wouldn’t shut off.
This machine kills hope.