6 ms·

There's a saying in poker that if you sit down at the table and can't immediately find the donkey(1), you are the donkey. At some point, anyone playing around i

by xoxxala 6mo ago

There's a saying in poker that if you sit down at the table and can't immediately find the donkey(1), you are the donkey. At some point, anyone playing around in a prediction without insider info will be the donkey. 1: https://en.wikipedia.org/wiki/Glossary_of_poker_terms#donkey https://en.wikipedia.org/wiki/Glossary_of_poker_terms#donkey

baq 6mo ago
Arguably it’s a very useful property of prediction markets as long as everyone is aware that’s the case.
tasuki 6mo ago
Yes, and let me add that that's by design. Prediction markets' main function is to incentivize people with private information to make it public.
- mint5 6mo ago
  How does making a wager cause insider info to be public? All it means is an anonymous account placed money on the outcome, how does it make public anything that an insider knows? It doesn’t. It incentives them to keep the info secret in order to profit or a wager on a related outcome. The insider info remains secret, all people know is some bloke stood up a new account and placed a big bet. And for these short timespan bets, it seems utterly useless. If the wagers were only allowed on things two weeks out, and not allow bets on short term events then maybe it could show more info.
  - nl 6mo ago
    The price movement is the indicator that there is insider information. Of course there are lots of problems with this theory - in large markets a single trader has to make large bets to move the market, and with the current leadership the price moves large amounts unpredictably as well based on the latest statements. But the mechanism itself makes sense. It's unclear if that's a good thing. Of course some people know secret information before hand. Is disclosing that always good?
    - arter45 6mo ago
      Another problem is, people may actually want to bet on random outcomes, because of money laundering or simply because this is how gambling essentially works. That huge account could be an insider or a billionaire with a few hundreds k to burn. Or maybe they want to orient people’s opinions towards a certain outcome. Claiming that price movement in a prediction market reveals some amount of truth implicitly assumes that: - people bet on something they believe to be true, and not to sway other people’s opinions or simply to burn money, - people bet on something they believe to be true because they have specific private information (e.g. I bet on the Red Sox not because I think they’re good but because I know things other don’t about their opponents, their physical conditions and so on). - their belief is actually correct (eg if I’m in the CIA and I know that the Soviets are about to launch a nuclear missile I can bet on it… but I don’t know that an officer down the line will refuse to do that). Even if this was true, there is an issue of timing and consequences. Example: imagine it’s 2011 and some CIA or DoD officer makes huge, sudden bets on the fact that Bin Laden will be caught. Some AQ people get wind of this and move Bin Laden somewhere else. Congrats, your price movement signaled non public information to the market! Another issue is that these bets tend to rely on public sources, news reports and so on. A journalist in Israel was threatened to change his news reports so that certain people didn’t have to lose on a prediction market. This could become more and more common, and with the advent of AI generated pictures who are you going to believe? Are you losing money because you bet on the wrong outcome or simply because someone with enough resources ensured that your outcome was never going to be reported?
      - chii 6mo ago
        > Congrats, your price movement signaled non public information to the market! so from bin laden's perspective, this would've been a good outcome isnt it? Can't say what a good outcome is without saying who. What if enemies of the USA had corrupt generals who also make bets on anti-US actions to profit personally, and inadvertently reveal information to the CIA/NSA, who then prevent such anti-US actions? Would that not have been a good outcome as well? Information is information - and one cannot say if it's good or not. However, i am a believer that more information generally do good than bad - assuming the consumer of said information is smart. > Are you losing money because you bet on the wrong outcome ... It doesnt matter, because you chose to bet. You do not need to bet in order to make use of the information being revealed by those who are betting.
- globular-toast 6mo ago
  We get it but what good is it if the insiders come and bet mere hours before the event happens? So we could have known a few hours early? I feel like this is just people trying to justify gambling. In the UK bookies have been doing this forever, it's nothing new. It's just gambling.
- jmcgough 6mo ago
  By this logic, wouldn't prediction markets be a national security threat?
  - bathtub365 6mo ago
    Sure, but look at who controls the national security apparatus in the US at the moment.
    - k33n 6mo ago
      [flagged]
      - analognoise 6mo ago
        Who should have never been allowed to run, both for his felony criminal conviction, his plot to tamper with the election, and of course the assault on the capitol. This is before we even add on the Epstein stuff, or his latest war. It’s pretty clear Trump is a threat and everyone in his orbit needs to end up in prison.
        k33n 6mo ago
        [flagged]
        myvoiceismypass 6mo ago
        Anyone that supports a person who tried to stop the legal and rightful transfer of power in 2021 has no respect for democracy or the Constitution.
        k33n 6mo ago
        [flagged]
        analognoise 6mo ago
- BrenBarn 6mo ago
  The way it's working though is that they don't provide much information, because there's very little time between their public bet and the outcome they bet on.
- watwut 6mo ago
  No, its main function is to extract as much money as possible from those who bet without that private information and without ability to influence bets. They do not actually make the information public.
- UncleMeat 6mo ago
  This is the theoretical claim. Now look at Polymarket's advertising. It is 100% presented as a gambling platform, not an information discovery system. There is nothing saying "don't play if you don't have insider information." I do not think that we can reasonably fall back on this defense of these platforms anymore. I also don't much societal value in these platform's ability to suggest political events a few hours before they happen. And this wasn't even really the original theoretical claim for these markets. The goal was to financially incentivize research and deep investigation, not to financially incentivize people who have access to hidden information by default. If somebody developed a system for predicting cease fires and used that to win in these markets then we've created a new thing for society. If somebody is just in the room when a cease fire is decided we haven't progressed society at all. All we've done is create a new way for people with power to extract personal wealth.
- DonsDiscountGas 6mo ago
  The value of that to the public is pretty minimal though, seeing as that private information becomes public 1-4 hours before it would've been publicized in the more traditional way. And the signal itself is extremely noisy.
- sgnelson 6mo ago
  I'm so tired of hearing this explanation. It completely ignores reality. As everyone has said, what's the point? You get information 2 minutes ahead of time? But how do you know that guy actually has the real info? Because he put a lot of money on it? Okay, then how am I supposed to make use of that information. I'm so tired of people parroting this line as if it somehow explains everything. These new Prediction Markets are nothing but a new way of gambling. period.
  - tasuki 6mo ago
    > These new Prediction Markets are nothing but a new way of gambling. There are two kinds of participants, those with inside information and liquidity providers. The liquidity providers incentivize the insiders to share the information. Yes sure there are gamblers, but here they're doing something useful – providing liquidity. If they just went to the casino, the money would be lost without any useful output.
aaron695 6mo ago
[dead]

by xoxxala 6mo ago

baq 6mo ago

Arguably it’s a very useful property of prediction markets as long as everyone is aware that’s the case.

tasuki 6mo ago

Yes, and let me add that that's by design. Prediction markets' main function is to incentivize people with private information to make it public.

mint5 6mo ago
How does making a wager cause insider info to be public? All it means is an anonymous account placed money on the outcome, how does it make public anything that an insider knows? It doesn’t. It incentives them to keep the info secret in order to profit or a wager on a related outcome. The insider info remains secret, all people know is some bloke stood up a new account and placed a big bet. And for these short timespan bets, it seems utterly useless. If the wagers were only allowed on things two weeks out, and not allow bets on short term events then maybe it could show more info.
- nl 6mo ago
  The price movement is the indicator that there is insider information. Of course there are lots of problems with this theory - in large markets a single trader has to make large bets to move the market, and with the current leadership the price moves large amounts unpredictably as well based on the latest statements. But the mechanism itself makes sense. It's unclear if that's a good thing. Of course some people know secret information before hand. Is disclosing that always good?
  - arter45 6mo ago
    Another problem is, people may actually want to bet on random outcomes, because of money laundering or simply because this is how gambling essentially works. That huge account could be an insider or a billionaire with a few hundreds k to burn. Or maybe they want to orient people’s opinions towards a certain outcome. Claiming that price movement in a prediction market reveals some amount of truth implicitly assumes that: - people bet on something they believe to be true, and not to sway other people’s opinions or simply to burn money, - people bet on something they believe to be true because they have specific private information (e.g. I bet on the Red Sox not because I think they’re good but because I know things other don’t about their opponents, their physical conditions and so on). - their belief is actually correct (eg if I’m in the CIA and I know that the Soviets are about to launch a nuclear missile I can bet on it… but I don’t know that an officer down the line will refuse to do that). Even if this was true, there is an issue of timing and consequences. Example: imagine it’s 2011 and some CIA or DoD officer makes huge, sudden bets on the fact that Bin Laden will be caught. Some AQ people get wind of this and move Bin Laden somewhere else. Congrats, your price movement signaled non public information to the market! Another issue is that these bets tend to rely on public sources, news reports and so on. A journalist in Israel was threatened to change his news reports so that certain people didn’t have to lose on a prediction market. This could become more and more common, and with the advent of AI generated pictures who are you going to believe? Are you losing money because you bet on the wrong outcome or simply because someone with enough resources ensured that your outcome was never going to be reported?
    - chii 6mo ago
      > Congrats, your price movement signaled non public information to the market! so from bin laden's perspective, this would've been a good outcome isnt it? Can't say what a good outcome is without saying who. What if enemies of the USA had corrupt generals who also make bets on anti-US actions to profit personally, and inadvertently reveal information to the CIA/NSA, who then prevent such anti-US actions? Would that not have been a good outcome as well? Information is information - and one cannot say if it's good or not. However, i am a believer that more information generally do good than bad - assuming the consumer of said information is smart. > Are you losing money because you bet on the wrong outcome ... It doesnt matter, because you chose to bet. You do not need to bet in order to make use of the information being revealed by those who are betting.
globular-toast 6mo ago
We get it but what good is it if the insiders come and bet mere hours before the event happens? So we could have known a few hours early? I feel like this is just people trying to justify gambling. In the UK bookies have been doing this forever, it's nothing new. It's just gambling.
jmcgough 6mo ago
By this logic, wouldn't prediction markets be a national security threat?
- bathtub365 6mo ago
  Sure, but look at who controls the national security apparatus in the US at the moment.
  - k33n 6mo ago
    [flagged]
    - analognoise 6mo ago
      Who should have never been allowed to run, both for his felony criminal conviction, his plot to tamper with the election, and of course the assault on the capitol. This is before we even add on the Epstein stuff, or his latest war. It’s pretty clear Trump is a threat and everyone in his orbit needs to end up in prison.
      - k33n 6mo ago
        [flagged]
        myvoiceismypass 6mo ago
        Anyone that supports a person who tried to stop the legal and rightful transfer of power in 2021 has no respect for democracy or the Constitution.
        k33n 6mo ago
        [flagged]
        analognoise 6mo ago
BrenBarn 6mo ago
The way it's working though is that they don't provide much information, because there's very little time between their public bet and the outcome they bet on.
watwut 6mo ago
No, its main function is to extract as much money as possible from those who bet without that private information and without ability to influence bets. They do not actually make the information public.
UncleMeat 6mo ago
This is the theoretical claim. Now look at Polymarket's advertising. It is 100% presented as a gambling platform, not an information discovery system. There is nothing saying "don't play if you don't have insider information." I do not think that we can reasonably fall back on this defense of these platforms anymore. I also don't much societal value in these platform's ability to suggest political events a few hours before they happen. And this wasn't even really the original theoretical claim for these markets. The goal was to financially incentivize research and deep investigation, not to financially incentivize people who have access to hidden information by default. If somebody developed a system for predicting cease fires and used that to win in these markets then we've created a new thing for society. If somebody is just in the room when a cease fire is decided we haven't progressed society at all. All we've done is create a new way for people with power to extract personal wealth.
DonsDiscountGas 6mo ago
The value of that to the public is pretty minimal though, seeing as that private information becomes public 1-4 hours before it would've been publicized in the more traditional way. And the signal itself is extremely noisy.
sgnelson 6mo ago
I'm so tired of hearing this explanation. It completely ignores reality. As everyone has said, what's the point? You get information 2 minutes ahead of time? But how do you know that guy actually has the real info? Because he put a lot of money on it? Okay, then how am I supposed to make use of that information. I'm so tired of people parroting this line as if it somehow explains everything. These new Prediction Markets are nothing but a new way of gambling. period.
- tasuki 6mo ago
  > These new Prediction Markets are nothing but a new way of gambling. There are two kinds of participants, those with inside information and liquidity providers. The liquidity providers incentivize the insiders to share the information. Yes sure there are gamblers, but here they're doing something useful – providing liquidity. If they just went to the casino, the money would be lost without any useful output.

aaron695 6mo ago

[dead]