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A few major actors in predictions markets (1) Recreational or addicted gamblers (2) Hedging your investments or exposure to an event by betting on it as insur
by mothballed 7mo ago
A few major actors in predictions markets
(1) Recreational or addicted gamblers
(2) Hedging your investments or exposure to an event by betting on it as insurance
(3) Insiders
(4) Information arbitrage (researchers, etc)
Three (3) and Four (4) are probably the most important for conveying useful information in pricing. I see it as a good, not bad thing, they are involved.
- Insanity 7mo agomh. Guess my view of betting is too naive. I wouldn't have expected anything beyond (1). With my usual addictive behaviour, I think it's prob best I stay away from that though.. :)
- cwillu 7mo ago(1) provides an incentive for the rest to participate.
- CaptainNegative 7mo agoThere could also be some degree of "(5) bandwagon effect" players, who pump money into an outcome specifically to get people talking about its possibility, thereby increasing its probability of coming into fruition.
- freejazz 7mo agoCan anyone point to any instance of anyone benefitting from the information conveyed in these prediction markets?