4 ms·

>Why should we want prediction markets to be fair? I want them to reveal facts about the world. I do not think this is a reasonable position. The problem is th

by scoofy 10mo ago

>Why should we want prediction markets to be fair? I want them to reveal facts about the world. I do not think this is a reasonable position. The problem is that predicting "real facts about the world" creates a situation where you could take out an place a sizable bet on your neighbors house burning down. Allowing prediction markets is, thusly, inherently problematic. Allowing them to be anonymized with insider information, and you've a recipe for disastrous externalities.

vintermann 10mo ago
And to spell it out, you can then go burn your neighbours house down and profit from it. Predictions markets don't just predict, they can cause "unlikely" things to happen because they give a way of profiting from making "unlikely" things happen. This is a problem with plain old stock market insider trading too, and with sports betting when the participants take out bets on themselves.
bjackman 10mo ago
You can say you don't want prediction markets and that's fine. It's not responding to my comment though which is saying that if we have prediction markets, the goal should be for them to reveal facts about the world. If you think prediction or stock markets should be "fair" then you have a very bizarre definition of fair (one that's compatible with a game that only rich people can win). Also desiring "fairness" implies that to imply the market's primary purpose is as a game. If it's just a game, it's nothing but toxic gambling. ANYWAY: pointing to one possible case of misuse and then leaping to "inherently problematic" is pretty weak IMO. Hopefully you can tell I'm not a prediction market booster, there's a lot about them that I think it's pretty suspect. But this is a pretty lame line of reasoning IMO. "Someone might shoot people with it" -> valid reason for gun control. Guns are for shooting people. "Someone might stab someone with it" -> not a valid reason to ban knives. We already ban stabbing people. We take precautions to try and mitigate the dangers of knives, because they have a very big upside.
- jen20 10mo ago
  They aren’t predicting anything if the result is known a priori. Words matter - “prediction markets” just smooths over grift by making it sound reasonable.
  - sparky_z 10mo ago
    The result was not, and could never have been, known a priori. All sorts of random things could have gone wrong with the operation causing the raid to fail and Maduro to remain in power. Trump could have just randomly changed his mind, or postponed the raid to beyond the end of January (the cutoff for the betting market). The person placing the bet was still taking a chance, but it was an informed chance that shifted the market probability more in line with reality. If it helps, you can think of the money made as the payment to a confidential informant for information that contributed to a more complete picture of the world. It just happens via a distributed algorithm, using market forces, rather than at the discretion of some intelligence officer or whoever. The more important the information you have to share, the more it moves the market and the bigger your "fee". It's not being a "grifter" to provide true information that moves the market correctly. In fact, this mechanism filters out the actual grifters - you can't make money (in expectation) by providing false information, like traditional informants sometimes can. This "intelligence gathering" function is the primary goal of a prediction market. It's the only reason it makes sense to even have them. If you turn it into some parlor game where everybody who participates has access to all the same information, then what are we even doing here?
    - orwin 10mo ago
      Wasn't a guy at google seeing the top seach result before publication and bet on those? That's also intelligence gathering, so i guess that's okay?
      - sparky_z 10mo ago
        I mean, yes, unironically. If the goal of a prediction market is to find out the truth about the world, that's what will get you there faster. Google might feel differently about whether it's OK in that case, but that's their prerogative. Ask yourself: If the CIA really needed to know in advance what the top search result was going to be with as much accuracy as possible (for some weird reason, doesn't matter why), how would they go about doing it? Would they spend a bunch of time evaluating all of the public information, or would they just bribe (or otherwise convince) an insider at Google to tell them?

by scoofy 10mo ago

vintermann 10mo ago

And to spell it out, you can then go burn your neighbours house down and profit from it. Predictions markets don't just predict, they can cause "unlikely" things to happen because they give a way of profiting from making "unlikely" things happen. This is a problem with plain old stock market insider trading too, and with sports betting when the participants take out bets on themselves.

bjackman 10mo ago

You can say you don't want prediction markets and that's fine. It's not responding to my comment though which is saying that if we have prediction markets, the goal should be for them to reveal facts about the world. If you think prediction or stock markets should be "fair" then you have a very bizarre definition of fair (one that's compatible with a game that only rich people can win). Also desiring "fairness" implies that to imply the market's primary purpose is as a game. If it's just a game, it's nothing but toxic gambling. ANYWAY: pointing to one possible case of misuse and then leaping to "inherently problematic" is pretty weak IMO. Hopefully you can tell I'm not a prediction market booster, there's a lot about them that I think it's pretty suspect. But this is a pretty lame line of reasoning IMO. "Someone might shoot people with it" -> valid reason for gun control. Guns are for shooting people. "Someone might stab someone with it" -> not a valid reason to ban knives. We already ban stabbing people. We take precautions to try and mitigate the dangers of knives, because they have a very big upside.

jen20 10mo ago
They aren’t predicting anything if the result is known a priori. Words matter - “prediction markets” just smooths over grift by making it sound reasonable.
- sparky_z 10mo ago
  The result was not, and could never have been, known a priori. All sorts of random things could have gone wrong with the operation causing the raid to fail and Maduro to remain in power. Trump could have just randomly changed his mind, or postponed the raid to beyond the end of January (the cutoff for the betting market). The person placing the bet was still taking a chance, but it was an informed chance that shifted the market probability more in line with reality. If it helps, you can think of the money made as the payment to a confidential informant for information that contributed to a more complete picture of the world. It just happens via a distributed algorithm, using market forces, rather than at the discretion of some intelligence officer or whoever. The more important the information you have to share, the more it moves the market and the bigger your "fee". It's not being a "grifter" to provide true information that moves the market correctly. In fact, this mechanism filters out the actual grifters - you can't make money (in expectation) by providing false information, like traditional informants sometimes can. This "intelligence gathering" function is the primary goal of a prediction market. It's the only reason it makes sense to even have them. If you turn it into some parlor game where everybody who participates has access to all the same information, then what are we even doing here?
  - orwin 10mo ago
    Wasn't a guy at google seeing the top seach result before publication and bet on those? That's also intelligence gathering, so i guess that's okay?
    - sparky_z 10mo ago
      I mean, yes, unironically. If the goal of a prediction market is to find out the truth about the world, that's what will get you there faster. Google might feel differently about whether it's OK in that case, but that's their prerogative. Ask yourself: If the CIA really needed to know in advance what the top search result was going to be with as much accuracy as possible (for some weird reason, doesn't matter why), how would they go about doing it? Would they spend a bunch of time evaluating all of the public information, or would they just bribe (or otherwise convince) an insider at Google to tell them?