4 ms·

Isn’t one of the points of betting markets is to incentivize this? Now me, as someone who doesn’t have access to insider knowledge, can know that there’s a noti

by broof 6mo ago

Isn’t one of the points of betting markets is to incentivize this? Now me, as someone who doesn’t have access to insider knowledge, can know that there’s a noticeably increased chance of what’s going to happen. I do think maybe there should be some sort of feature to prevent last minute bets that utilizes insider knowledge, and I do admit there are considerable negative externalities to this system but it’s not clear to me that this is for sure bad.

cj 6mo ago
> Isn’t one of the points of betting markets is to incentivize this? No. It’s an unintended side effect that risks breaking trust in the system by (the majority of) players who don’t have insider knowledge.
- phil21 6mo ago
  Eh what? It’s literally the only reason for prediction markets to exist. Otherwise they are simple gambling and pointless. The only way you get more wisdom from “the crowd” is if it teases folks who hold non-public (or at least less public) information into the market to refine the odds towards what they should be. Without insider information the entire concept is dead on arrival. Yes randos are gonna gamble because they either don’t understand the game they are playing or are simple degenerate gamblers who want something else to gamble on. Others are going to think they know better or have limited insider information that isn’t worth as much as they think, or is not as accurate as they believe. And the delusional who simply think they know better for no logical reason but have convinced themselves otherwise.
  - hatthew 6mo ago
    > Otherwise they are simple gambling maybe I'm dumb but I thought gambling is the whole point
    - olgkov 6mo ago
      It seems like two different definitions of 'point' are getting mixed. Yes, for many participants it feels like gambling. But structurally, prediction markets are closer to price discovery systems -like financial markets - where the side effect (or goal, depending on your view) is better forecasts, not just entertainment
  - bethekidyouwant 6mo ago
    That’s not true. Consider a jar of jellybeans.
    - phil21 6mo ago
      That would go under someone who thinks they have more information than they think they do. Perhaps you are great at mathematics and think you can estimate much better than the average bidder. The person who filled the jar is going to have even better information than you do. Or perhaps not. Maybe they miscounted or their manager added a handful before they screwed the top of the jar on. If the market that is taking the bet also filled the jar, then sure it’s just outright fraud at that point. But the market exists to get the real information into the open. Betting that an insider just isn’t going to play is a variable you consider when placing your bet imo.
    - echelon 6mo ago
      A "market" is hypothesized to be "efficient" at price discovery. An efficient "prediction market" would more quickly resolve to its expected outcome due to not only skin-in-the-game bets by experts, but also the influence of insiders. Furthermore, bets are likely to shape outcomes. Betting someone will be assassinated (not allowed on Polymarket) would likely increase the probability of that outcome had there been no bet at all.
      - bethekidyouwant 6mo ago
        I’ve heard this assassination thing said, but I don’t see it. Someone still has to kill said person and somehow profit from the unlikelihood of this outcome. I’m not saying it’s impossible but I’m just saying that it’s never happened and maybe never will.
        echelon 6mo ago
        There is no assassination market to test it against. If there was, I think you'd see quite a few public figures on the list. And I think it _would_ cause folks to die. Which is why it's banned or regulated. (I'm actually not sure what the legal status is, just that Polymarket and US prediction markets disallow it.)
  - lovich 6mo ago
    War is peace. Ignorance is strength. Openly corrupt markets that feature insiders with secret knowledge taking money from gambling addicts and rubes is actually good cause the crowd is now wiser.
    - broof 6mo ago
      Unironically yes. Someone bet a mid sized amount and now we all share in that potential insider knowledge. A small scale example is my spouse said that the election odds from her home country were not realistic because all the westerners were betting a candidate would win but weren’t accounting for corruption that she felt was guaranteed to happen. Turns out she was right.
      - lovich 6mo ago
        Ah good. The NBA/NFL/MLB/etc should let players bet on whether they win or lose. Letting those with the influence on events being able to make money on them has never degraded a system before. Someone must have just mistakenly put in regulations against insider trading before, for no good reason. Luckily this isn’t anything like the normal tech play of figuring out a loophole or flat out ignoring the law and hoping you get too big before the regulators catch up.
        maxerickson 6mo ago
        If athletes didn't face consequences for manipulating betting markets, I think you'd see people become less and less likely to bet on sports outcomes. People naturally don't like a rigged game, you don't have to tell them not to play it. With these betting markets, do you think it's critical that they exist, but with bans on insider bets? Because I'm not sure anyone you are moralizing at is taking up the argument that it's critical that they exist.
        lovich 6mo ago
        > With these betting markets, do you think it's critical that they exist, but with bans on insider bets? No, I don’t think they should exist at all.
  - cj 6mo ago
    Have you been to a casino? Gambling is a billion dollar business.
  - UncleMeat 6mo ago
    > Otherwise they are simple gambling and pointless. People find gambling fun. Owners of gambling services make a lot of money. The prediction markets both run ads that present themselves as gambling products. Both of these things are points that can sustain large businesses.
- cyanydeez 6mo ago
  yarg, its a betting market that takes uncontrolled bets. I dont see how anyone that's not part of the grift economy can claim it's anything but.
colechristensen 6mo ago
The same logic can be used the opposite way, you can, with large amounts of money, manipulate events or people's responses to them. * you can place large bets on events you have influence on the outcome for and make large amounts of money * you can place large bets on events and then threaten people who have influence with a big stick * you can place large bets expecting to lose money in order to change the outcome or a related outcome expecting people to look at the odds and change their behavior And probably lots of other ways. It corrupts events and on a world stage with unethical government in vogue... it's not impossible for people to manipulate a war in order to make bets go their way.
- Lerc 6mo ago
  There was recently a story about a reporter who faced threats because their reporting contained a detail that while not significantly impactful (although about a literal impact) in it's own right changed the win conditions on a prediction bet. I think prediction markets worked as an idea to provide a wisdom of the crowd view when they were being used in good faith, but rewards cause people to prioritise winning and gaming the system pays better than playing fairly.
  - phil21 6mo ago
    There is no unfairly or fairly playing a prediction market. That's kind of the point. They don't work if you try to regulate them like they are a stock market or sports betting market. If you place money on one as a layman, you should consider yourself the dumb money. Lots of folks have convinced themselves they "know better" though, so it's a very easy psychological sell. You either allow a free for all, or they should be simply outright banned. I mean, they should probably be banned either way - but without the prediction part this is not a single redeeming factor for them to exist. The consequences for someone betting on classified information would need to come from the agency/government/etc. that finds out their staff is engaging in betting on privileged information. The market itself is simply taking bets and doing what it's designed to do. The bettor gets to decide if the risk is worth it.
peter422 6mo ago
Can we at least debate the obvious externality that an insider might skew their advice or actions to personally profit instead of doing whatever they think is most appropriate for their job? That seems like a big one
- broof 6mo ago
  Yeah I agree that there are big negative externalities and this is one. I’m more talking about is someone with insider knowledge but not the ability to influence - is that a bad thing specifically for these type of markets?
- jMyles 6mo ago
  That phenomenon exists regardless. There may be some benefit to make it transparent. All war is for profit anyway - on sufficiently long time scales, stopping war is the imperative.
UncleMeat 6mo ago
This was one of the theoretical points of betting markets. But there are two large concrete betting markets now. And they advertise not as a "world state discovery system" but as a gambling platform for people to try their luck on. They are also large businesses that are making their owners rich. Falling back on "oh we are just interested in the intellectual exercise of information discovery" is not tenable at this point.

by broof 6mo ago

cj 6mo ago

> Isn’t one of the points of betting markets is to incentivize this? No. It’s an unintended side effect that risks breaking trust in the system by (the majority of) players who don’t have insider knowledge.

phil21 6mo ago
Eh what? It’s literally the only reason for prediction markets to exist. Otherwise they are simple gambling and pointless. The only way you get more wisdom from “the crowd” is if it teases folks who hold non-public (or at least less public) information into the market to refine the odds towards what they should be. Without insider information the entire concept is dead on arrival. Yes randos are gonna gamble because they either don’t understand the game they are playing or are simple degenerate gamblers who want something else to gamble on. Others are going to think they know better or have limited insider information that isn’t worth as much as they think, or is not as accurate as they believe. And the delusional who simply think they know better for no logical reason but have convinced themselves otherwise.
- hatthew 6mo ago
  > Otherwise they are simple gambling maybe I'm dumb but I thought gambling is the whole point
  - olgkov 6mo ago
    It seems like two different definitions of 'point' are getting mixed. Yes, for many participants it feels like gambling. But structurally, prediction markets are closer to price discovery systems -like financial markets - where the side effect (or goal, depending on your view) is better forecasts, not just entertainment
- bethekidyouwant 6mo ago
  That’s not true. Consider a jar of jellybeans.
  - phil21 6mo ago
    That would go under someone who thinks they have more information than they think they do. Perhaps you are great at mathematics and think you can estimate much better than the average bidder. The person who filled the jar is going to have even better information than you do. Or perhaps not. Maybe they miscounted or their manager added a handful before they screwed the top of the jar on. If the market that is taking the bet also filled the jar, then sure it’s just outright fraud at that point. But the market exists to get the real information into the open. Betting that an insider just isn’t going to play is a variable you consider when placing your bet imo.
  - echelon 6mo ago
    A "market" is hypothesized to be "efficient" at price discovery. An efficient "prediction market" would more quickly resolve to its expected outcome due to not only skin-in-the-game bets by experts, but also the influence of insiders. Furthermore, bets are likely to shape outcomes. Betting someone will be assassinated (not allowed on Polymarket) would likely increase the probability of that outcome had there been no bet at all.
    - bethekidyouwant 6mo ago
      I’ve heard this assassination thing said, but I don’t see it. Someone still has to kill said person and somehow profit from the unlikelihood of this outcome. I’m not saying it’s impossible but I’m just saying that it’s never happened and maybe never will.
      - echelon 6mo ago
        There is no assassination market to test it against. If there was, I think you'd see quite a few public figures on the list. And I think it _would_ cause folks to die. Which is why it's banned or regulated. (I'm actually not sure what the legal status is, just that Polymarket and US prediction markets disallow it.)
- lovich 6mo ago
  War is peace. Ignorance is strength. Openly corrupt markets that feature insiders with secret knowledge taking money from gambling addicts and rubes is actually good cause the crowd is now wiser.
  - broof 6mo ago
    Unironically yes. Someone bet a mid sized amount and now we all share in that potential insider knowledge. A small scale example is my spouse said that the election odds from her home country were not realistic because all the westerners were betting a candidate would win but weren’t accounting for corruption that she felt was guaranteed to happen. Turns out she was right.
    - lovich 6mo ago
      Ah good. The NBA/NFL/MLB/etc should let players bet on whether they win or lose. Letting those with the influence on events being able to make money on them has never degraded a system before. Someone must have just mistakenly put in regulations against insider trading before, for no good reason. Luckily this isn’t anything like the normal tech play of figuring out a loophole or flat out ignoring the law and hoping you get too big before the regulators catch up.
      - maxerickson 6mo ago
        If athletes didn't face consequences for manipulating betting markets, I think you'd see people become less and less likely to bet on sports outcomes. People naturally don't like a rigged game, you don't have to tell them not to play it. With these betting markets, do you think it's critical that they exist, but with bans on insider bets? Because I'm not sure anyone you are moralizing at is taking up the argument that it's critical that they exist.
        lovich 6mo ago
        > With these betting markets, do you think it's critical that they exist, but with bans on insider bets? No, I don’t think they should exist at all.
- cj 6mo ago
  Have you been to a casino? Gambling is a billion dollar business.
- UncleMeat 6mo ago
  > Otherwise they are simple gambling and pointless. People find gambling fun. Owners of gambling services make a lot of money. The prediction markets both run ads that present themselves as gambling products. Both of these things are points that can sustain large businesses.
cyanydeez 6mo ago
yarg, its a betting market that takes uncontrolled bets. I dont see how anyone that's not part of the grift economy can claim it's anything but.

colechristensen 6mo ago

The same logic can be used the opposite way, you can, with large amounts of money, manipulate events or people's responses to them. * you can place large bets on events you have influence on the outcome for and make large amounts of money * you can place large bets on events and then threaten people who have influence with a big stick * you can place large bets expecting to lose money in order to change the outcome or a related outcome expecting people to look at the odds and change their behavior And probably lots of other ways. It corrupts events and on a world stage with unethical government in vogue... it's not impossible for people to manipulate a war in order to make bets go their way.

Lerc 6mo ago
There was recently a story about a reporter who faced threats because their reporting contained a detail that while not significantly impactful (although about a literal impact) in it's own right changed the win conditions on a prediction bet. I think prediction markets worked as an idea to provide a wisdom of the crowd view when they were being used in good faith, but rewards cause people to prioritise winning and gaming the system pays better than playing fairly.
- phil21 6mo ago
  There is no unfairly or fairly playing a prediction market. That's kind of the point. They don't work if you try to regulate them like they are a stock market or sports betting market. If you place money on one as a layman, you should consider yourself the dumb money. Lots of folks have convinced themselves they "know better" though, so it's a very easy psychological sell. You either allow a free for all, or they should be simply outright banned. I mean, they should probably be banned either way - but without the prediction part this is not a single redeeming factor for them to exist. The consequences for someone betting on classified information would need to come from the agency/government/etc. that finds out their staff is engaging in betting on privileged information. The market itself is simply taking bets and doing what it's designed to do. The bettor gets to decide if the risk is worth it.

peter422 6mo ago

Can we at least debate the obvious externality that an insider might skew their advice or actions to personally profit instead of doing whatever they think is most appropriate for their job? That seems like a big one

broof 6mo ago
Yeah I agree that there are big negative externalities and this is one. I’m more talking about is someone with insider knowledge but not the ability to influence - is that a bad thing specifically for these type of markets?
jMyles 6mo ago
That phenomenon exists regardless. There may be some benefit to make it transparent. All war is for profit anyway - on sufficiently long time scales, stopping war is the imperative.

UncleMeat 6mo ago

This was one of the theoretical points of betting markets. But there are two large concrete betting markets now. And they advertise not as a "world state discovery system" but as a gambling platform for people to try their luck on. They are also large businesses that are making their owners rich. Falling back on "oh we are just interested in the intellectual exercise of information discovery" is not tenable at this point.