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Lets consider a game. A coin will be flipped, and we can bet as much money as we want that either heads or tails will win. You will win $100 if the price in thi
by zack_amoveo 8y ago
Lets consider a game.
A coin will be flipped, and we can bet as much money as we want that either heads or tails will win.
You will win $100 if the price in this market stays >75% chance of heads for 7 days continuously.
So you keep buying up shares of heads, moving the price from 50 -> 60 -> 70 -> 80.
by the end you are betting $4 for the chance to win $1.
I know that the result is 50-50, so if I bet $1 against you, and have the chance to win $4, then that means my expected profit of taking this bet is %200.
Which makes this one of the best investments available on earth.
Which means many people will want to participate.
Every bet you make at the price 80-20 costs you $1, but is only worth $0.40. you are losing 60% of however much money you bet.
So if you bet $200, then your expected loss would be $120. which is even bigger than the $100 you could potentially win by manipulating the market.
It doesn't matter if I bribe a manipulator with $100, or with $1 billion. The same logic holds.
Having a vested interest in the outcome of a decision does not give you any ability to manipulate us into making that decision.
http://mason.gmu.edu/~rhanson/biashelp.pdf http://mason.gmu.edu/~rhanson/biashelp.pdf