4 ms·

It seems like there is a lot of resistance to these kinds of markets. Both in terms of bureaucratic restrictions, but also in terms of sentiment, including her

It seems like there is a lot of resistance to these kinds of markets. Both in terms of bureaucratic restrictions, but also in terms of sentiment, including here on HN. It's not that people disagree with the market clearing price, and are motivated to take a position. It's that they don't want other people to converge on a prediction in this way, and want to ban it, or keep the stakes so small that the market doesn't attract real expertise. It's like people are more into beliefs as decoration, rather than as something to compare and test against other people's beliefs.

sctb 3y ago
I find this interesting but I'm not sure I understand and I'd like to. Are you suggesting that there is a psychological aversion to prediction markets when the outcomes in question are as personal as politics? Would a similar analogy be, say, reluctance to the idea of finding one's romantic partner through a formalized process like algorithmic matchmaking?
- alphazard 3y ago
  What I have observed is: people calling these markets or their participants stupid. Then when they are told they can make money off of these supposedly stupid market participants, another made up reason is given why they won't put their money where their mouth is. If the algorithms for finding romantic partners are similar to netflix recommendations, then I think the aversion to them is totally warranted; I don't think that's the same thing. If a closed source algorithm makes bad recommendations, I can dismiss it as useless. If I don't like the price of a prediction market, I am forced to reconcile what I know about the structure of the market, with my personal beliefs. Anytime these markets come up in conversation or are used in a thought experiment, it reveals how few of an individual's outwardly professed beliefs they themselves take seriously. It's almost like most of the time someone says they believe something they are actually trying to manipulate anyone listening, rather than solicit criticism to refine the belief.
rspeele 3y ago
Another reason to keep the stakes small is to avoid problems like the assassination market[0]. I'd rather have podunk, inaccurate prediction markets like PredictIt than one which amounts to putting massive bounties on public figures. Or incentivizing public figures to do their job badly like make a surprise change in their vote on an important bill, just to win a longshot bet. PredictIt even used to have markets on, like, which SCOTUS justice would be the next to leave. People got paid when RBG died. That literally would've been this, if it weren't for the fact that the small investment limit kept the returns low. Realistically I don't think anybody was going to be committing assassinations just to make a thousand bucks. The same things that keep prediction markets inaccurate keep them from causing bigger problems. [0]https://en.wikipedia.org/wiki/Assassination_market https://en.wikipedia.org/wiki/Assassination_market
- willmadden 3y ago
  I would be a-ok making bets related to peoples' life expectancy illegal. There's no societal good from such a bet, and a lot of potential harm.
  - nemomarx 3y ago
    Aren't tontines already illegal? Is a bet on other people's deaths structurally very different than those?
Aurornis 3y ago
> It's that they don't want other people to converge on a prediction in this way, and want to ban it, or keep the stakes so small that the market doesn't attract real expertise. Do you have an example? I haven't seen this sentiment anywhere, including HN. I haven't actually seen much resistance to the existence of prediction markets. HN leans heavily toward freedom and letting consenting adults do what they want with their money on the internet. The majority of negative sentiment I see is against the obsession with prediction markets in certain circles (rationalist community, for example). Parts of the rationalist community speak about prediction markets as a solution for everything.
- alphazard 3y ago
  > Do you have an example? I haven't seen this sentiment anywhere, including HN. Do a Cmd+F for "stupid" on this very post. It may not be the prevailing sentiment, but it certainly occurs here. Maybe just a very vocal minority. Predict it has something like an $800 maximum. That's simply too small to get a PhD to quit his day job and start trading on prediction markets for a living. Until the market capitalization can attract experts, it will not reflect the opinions of experts. This seems to be a bureaucratic restriction. Why aren't the big exchanges creating order books for these markets?

sctb 3y ago

I find this interesting but I'm not sure I understand and I'd like to. Are you suggesting that there is a psychological aversion to prediction markets when the outcomes in question are as personal as politics? Would a similar analogy be, say, reluctance to the idea of finding one's romantic partner through a formalized process like algorithmic matchmaking?

alphazard 3y ago
What I have observed is: people calling these markets or their participants stupid. Then when they are told they can make money off of these supposedly stupid market participants, another made up reason is given why they won't put their money where their mouth is. If the algorithms for finding romantic partners are similar to netflix recommendations, then I think the aversion to them is totally warranted; I don't think that's the same thing. If a closed source algorithm makes bad recommendations, I can dismiss it as useless. If I don't like the price of a prediction market, I am forced to reconcile what I know about the structure of the market, with my personal beliefs. Anytime these markets come up in conversation or are used in a thought experiment, it reveals how few of an individual's outwardly professed beliefs they themselves take seriously. It's almost like most of the time someone says they believe something they are actually trying to manipulate anyone listening, rather than solicit criticism to refine the belief.

rspeele 3y ago

Another reason to keep the stakes small is to avoid problems like the assassination market[0]. I'd rather have podunk, inaccurate prediction markets like PredictIt than one which amounts to putting massive bounties on public figures. Or incentivizing public figures to do their job badly like make a surprise change in their vote on an important bill, just to win a longshot bet. PredictIt even used to have markets on, like, which SCOTUS justice would be the next to leave. People got paid when RBG died. That literally would've been this, if it weren't for the fact that the small investment limit kept the returns low. Realistically I don't think anybody was going to be committing assassinations just to make a thousand bucks. The same things that keep prediction markets inaccurate keep them from causing bigger problems. [0]https://en.wikipedia.org/wiki/Assassination_market https://en.wikipedia.org/wiki/Assassination_market

willmadden 3y ago
I would be a-ok making bets related to peoples' life expectancy illegal. There's no societal good from such a bet, and a lot of potential harm.
- nemomarx 3y ago
  Aren't tontines already illegal? Is a bet on other people's deaths structurally very different than those?

Aurornis 3y ago

> It's that they don't want other people to converge on a prediction in this way, and want to ban it, or keep the stakes so small that the market doesn't attract real expertise. Do you have an example? I haven't seen this sentiment anywhere, including HN. I haven't actually seen much resistance to the existence of prediction markets. HN leans heavily toward freedom and letting consenting adults do what they want with their money on the internet. The majority of negative sentiment I see is against the obsession with prediction markets in certain circles (rationalist community, for example). Parts of the rationalist community speak about prediction markets as a solution for everything.

alphazard 3y ago
> Do you have an example? I haven't seen this sentiment anywhere, including HN. Do a Cmd+F for "stupid" on this very post. It may not be the prevailing sentiment, but it certainly occurs here. Maybe just a very vocal minority. Predict it has something like an $800 maximum. That's simply too small to get a PhD to quit his day job and start trading on prediction markets for a living. Until the market capitalization can attract experts, it will not reflect the opinions of experts. This seems to be a bureaucratic restriction. Why aren't the big exchanges creating order books for these markets?