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Your statement that placing bets does not affect the outcome is true but I don't think you draw the right conclusion. If markets don't capture current sentimen
by merman 3y ago
Your statement that placing bets does not affect the outcome is true but I don't think you draw the right conclusion.
If markets don't capture current sentiment accurately then bet against every news item.
Let's say there's a market for a coin flip, and periodically, news comes out that makes the market lopsided (one way or the other). You should trade against it. Every time. If you are correct, this strategy will win on average, until the true breakthrough news item, which you'll be on the wrong side of. Just don't keep doubling down, because the final trade will be the one you lose.
This will demonstrate who has "deduced a more accurate prediction". Everyone else put together, as events unfold, or the opposite of that.
*changed to will win on average.
- anon84873628 3y agoI interpreted the parent comment to mean the bets don't have an influence in supply/demand behavior as they could in other cases. E.g if the markets heavily favor presidential candidate A to win, that may cause more people to vote for A, or for their opponents to stay home. Nothing like that can happen in this case because it's the laws of physics. It doesn't mean the bets can't instantiate some crowd sourced wisdom about physics or scientific research.
- patrickbuckley 3y agoI wonder if there is any quantum theory that can be applied to prediction markets. The act of observation can change a system. https://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat https://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat