4 ms·

Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read th

Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read the original papers on them. http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf https://www.jstor.org/stable/3216893 https://www.jstor.org/stable/3216893 https://mason.gmu.edu/~rhanson/insiderbet.pdf https://mason.gmu.edu/~rhanson/insiderbet.pdf

derektank 7mo ago
True experts need not be the people with the ultimate ability to effect change. Professional sports organizations ban their players from betting on games because it creates bad incentives to throw a winnable game. Banning elected representatives from gambling on prediction markets doesn’t make it impossible for insider information to surface, but it does prevent the governance equivalent of match fixing.
TarasBob 7mo ago
EXACTLY! We want insiders to participate in prediction markets and profit!
- yieldcrv 7mo ago
  profit is the participation incentive
Retr0id 7mo ago
It might've been the original purpose but in practice prediction markets have turned into a tool for gambling. It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?
- yieldcrv 7mo ago
  > a tool for gambling they require liquidity from people that are not in the know for adequate price discovery and exit liquidity worthwhile for participation
  - Retr0id 7mo ago
    You need liquidity but there is no requirement that it comes from gamblers
    - yieldcrv 7mo ago
      Tell that to the gamblers? like be for real right now
    - gzread 7mo ago
      If only people with accurate information bet, they wouldn't make any money so they'd stop betting.
      - Retr0id 7mo ago
        Betting on imperfect information is not the same thing as gambling
NiloCK 7mo ago
This may be the purpose of a prediction market for an outside observer. But the outside observer and the US government (or any org that holds private information) have different purposes - it's an adversarial mechanism. In particular: the government is free to just publish any insider/true information that it wants the public to know about. If it shared that purpose then the market wouldn't need to exist.
JumpCrisscross 7mo ago
> Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets American taxpayers pay a lot of money for a military and intelligence advantage. It's not clear it's in our interest for that knowledge to be made "public more quickly."
Esophagus4 7mo ago
Exactly. What we don’t want, and what we should enforce, is participants in prediction markets influencing the events they’re betting on (like the recent basketball betting scandal).

derektank 7mo ago

True experts need not be the people with the ultimate ability to effect change. Professional sports organizations ban their players from betting on games because it creates bad incentives to throw a winnable game. Banning elected representatives from gambling on prediction markets doesn’t make it impossible for insider information to surface, but it does prevent the governance equivalent of match fixing.

TarasBob 7mo ago

EXACTLY! We want insiders to participate in prediction markets and profit!

yieldcrv 7mo ago
profit is the participation incentive

Retr0id 7mo ago

It might've been the original purpose but in practice prediction markets have turned into a tool for gambling. It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?

yieldcrv 7mo ago
> a tool for gambling they require liquidity from people that are not in the know for adequate price discovery and exit liquidity worthwhile for participation
- Retr0id 7mo ago
  You need liquidity but there is no requirement that it comes from gamblers
  - yieldcrv 7mo ago
    Tell that to the gamblers? like be for real right now
  - gzread 7mo ago
    If only people with accurate information bet, they wouldn't make any money so they'd stop betting.
    - Retr0id 7mo ago
      Betting on imperfect information is not the same thing as gambling

NiloCK 7mo ago

This may be the purpose of a prediction market for an outside observer. But the outside observer and the US government (or any org that holds private information) have different purposes - it's an adversarial mechanism. In particular: the government is free to just publish any insider/true information that it wants the public to know about. If it shared that purpose then the market wouldn't need to exist.

JumpCrisscross 7mo ago

> Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets American taxpayers pay a lot of money for a military and intelligence advantage. It's not clear it's in our interest for that knowledge to be made "public more quickly."

Esophagus4 7mo ago

Exactly. What we don’t want, and what we should enforce, is participants in prediction markets influencing the events they’re betting on (like the recent basketball betting scandal).