3 ms·
Ha. The disaster alarms were ringing loudly in my head. Josh- I assume MS means Morgan Stanley, not Microsoft. If so, do you think all the sorts of problems w
by d4ft 17y ago
Ha. The disaster alarms were ringing loudly in my head. Josh-
I assume MS means Morgan Stanley, not Microsoft. If so, do you think all the sorts of problems we see financial organizations taking advantage of could be applied to gambling markets. That is, does Miller's contention that finance would not exist without transaction costs apply equally to gambling? If so, is gambling just another form of an options market? And finally, should gambling be treated like any other market with buy and sell prices (like commodities or bonds)?
- joshu 17y agoSo, I haven't thought about your premise at all. So this is off the cuff. I think that gambling about real-world events (election outcomes etc) can be a kind of futures market and are a valid kind of market. I'd want to be able to hedge against elections and so on. Manufactured events (horse racing?) and raw probability (die rolls) are probably not valid markets, IMO. Personally, I think that the problems we see because of financial organizations misbehaving are due to regulatory issues rather than structural issues.
- d4ft 17y agoOh, I definitely wasn't passing judgment on financial firms. By "problems", I meant reducing transaction costs by bundling and/or securitizing. I was more referring to the general problem being that capital markets are not perfect (in the economic sense). The real question is how one would actually perform a hedge in a gambling market. I guess, what it comes down to, is 1) are there hedging opportunities and 2) if not, why not?