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So what I’m learning from this is that unsurprisingly this unregulated market has a tonne of market manipulation. Not sure why anyone would get involved if they

So what I’m learning from this is that unsurprisingly this unregulated market has a tonne of market manipulation. Not sure why anyone would get involved if they didn’t plan to cheat. How long before there’s a bomb threat at the CDC in order to win a prediction bet?

barry-cotter 6y ago
> Not sure why anyone would get involved if they didn’t plan to cheat. Some markets are full of dumb money. Some people are mistaken about whether they are the dumb money or the smart money. Some people really are smart money and they can make large, fast nearly riskless returns on invested capital. People make money in large liquid markets with many sophisticated participants all the time. This has need true as long as stock, bond and commodity markets have existed, in markets with and without bans on insider trading. > How long before there’s a bomb threat at the CDC in order to win a prediction bet? How long before there’s a bomb threat at Pfizer to make a short part off big? Criminals and terrorists are not generally known for their skills at long term or strategic planning.
- paulgb 6y ago
  > How long before there’s a bomb threat at Pfizer to make a short part off big? Fair point, but the anonymity of the markets mentioned in the post matters here. You can short a stock or buy put options, but if the SEC gets suspicious they can trace them back to you (and there are occasional stories of this happening, like the guy who set off actual bombs at Target). With anonymous prediction markets, they would have a harder time figuring out who stood to benefit.
- deleted 6y ago
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dalbasal 6y ago
Well... You can cheat and lose. You can be cheated and win. Cheating hurts market integrity, but it doesn't kill it. Even consistent negative returns don't always kill a market. They can sometimes even live on as casinos, where average returns are guaranteed to be negative. Markets really hard to kill with market forces. Hence the Lenin-Luxembourg disagreement.

barry-cotter 6y ago

> Not sure why anyone would get involved if they didn’t plan to cheat. Some markets are full of dumb money. Some people are mistaken about whether they are the dumb money or the smart money. Some people really are smart money and they can make large, fast nearly riskless returns on invested capital. People make money in large liquid markets with many sophisticated participants all the time. This has need true as long as stock, bond and commodity markets have existed, in markets with and without bans on insider trading. > How long before there’s a bomb threat at the CDC in order to win a prediction bet? How long before there’s a bomb threat at Pfizer to make a short part off big? Criminals and terrorists are not generally known for their skills at long term or strategic planning.

paulgb 6y ago
> How long before there’s a bomb threat at Pfizer to make a short part off big? Fair point, but the anonymity of the markets mentioned in the post matters here. You can short a stock or buy put options, but if the SEC gets suspicious they can trace them back to you (and there are occasional stories of this happening, like the guy who set off actual bombs at Target). With anonymous prediction markets, they would have a harder time figuring out who stood to benefit.
deleted 6y ago
[deleted]

dalbasal 6y ago

Well... You can cheat and lose. You can be cheated and win. Cheating hurts market integrity, but it doesn't kill it. Even consistent negative returns don't always kill a market. They can sometimes even live on as casinos, where average returns are guaranteed to be negative. Markets really hard to kill with market forces. Hence the Lenin-Luxembourg disagreement.