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The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? You’re just asking to get screwed. Thou

The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? You’re just asking to get screwed. Though it’s not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green. Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but it’s another addictive outlet for those vulnerable to gambling addiction.

lostlogin 6mo ago
> The current setup does sort of seem like a tax on being stupid. More like a tax on being ethical or having any morality.
- deleted 6mo ago
  [deleted]
- jaredklewis 6mo ago
  What is unethical? The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone. Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do that, we might as well just ban prediction markets altogether. I don't have a strong opinion either way on that, but a prediction market without insiders is pointless.
  - jackyinger 6mo ago
    Insider trading is unethical, and has long been recognized as such. It is outrageous for you to suggest that it is a good thing. It is not a free market if there is insider trading. If insiders are trading other market participants are by definition getting screwed by what was advertised as a fair, impartial system. You certainly wouldn't participate in a market where you did not think you had fair odds. Tho maybe you're inclined towards the rigging side of things. Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets?
    - jaredklewis 6mo ago
      > Insider trading is unethical It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information. Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the market was able to provide. In prediction markets, allowing insider trading would be disincentive to participation by non-insiders, which would be a good thing, because the market should surface the most accurate information as possible and insiders have more accurate information than non-insiders. > and has long been recognized as such. Prediction markets are in their infancy. They've only really existed for about a decade and even now are tiny compared with markets like commodities or equities. So I don't see how this could have been "long recognized." > It is outrageous for you to suggest that it is a good thing. This is not an argument. > You certainly wouldn't participate in a market where you did not think you had fair odds. Of course I wouldn't and I wouldn't advise anyone else to do so. But why would we want uninformed people participating in prediction markets? I don't think they should. What does "fair" even mean here? If Alice is more informed than Bob about X, she'll probably be better at making predictions about X. I guess it is "unfair," but what would the point of a prediction market be if we only allowed uninformed people to participate? Then it's more like a survey of what the average person thinks will happen, which is probably common knowledge, so we don't need a market to find that out. > Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets? Prediction market odds for elections and important world events are regularly quoted in the press and AFAICT seem to more accurate than pundits and and oped writers at predicting the future. A low bar, but still, if we are going to speculate about the future, we might as well see what actually informed people think.
      - 400thecat 6mo ago
        I completely agree with you. The only thing I would add is, that prediction markets are not necessarily oracles for predicting the future. They can just as well be used for hedging: imagine, hypothetically I really do not want Trump to win. I can bet on Trump, not because I want or expect him to win, but to hedge my position (perhaps my business would suffer if Trump wins)
  - blurbleblurble 6mo ago
    "Information" is not neutrally reflective of some objective, deterministic reality. Processes involving information are slippery and reflexive, and that's the danger people are all but shouting for you to see. The feedback loops have extreme potential. The danger isn't in "exposing information" it's in people coercing reality to fit their bet. Peoples' lives are on the line. The wild thing is that prediction market dabbler rationalists who think they're betting on the outcome of a pre-written fiction story are actually just upping the reward for someone to come along and bomb people to death. Your participation is not neutral. You are culpable in the outcome of the situation you're "gambling" on which has not been determined yet and you are literally throwing fuel on the fire. No matter which way you bet it's fuel. I'm sorry, I don't believe you personally deserve it but for the betterment of the everyone we have no choice but to shame people like you (prediction market rationalizers) via downvotes and hot replies until you can see through the limits of your overly simple model of reality. I don't think you're a bad or stupid person, but when it comes to your views on prediction markets, they are very bad and very stupid. Thankfully you are not your beliefs and you are free to change them at any time. I beg you to reconsider this one.
    - wallst07 6mo ago
      This sounds like a poor attempt at attempting to be on the right side of morality through manipulation and shame. There is nothing here that tries to help someone understand your viewpoint. Let's start of with something simple. Should a single wager between two people be illegal, should sports betting at all be legal? Is it only illegal if one or more entities facilitate the bet?
      - blurbleblurble 6mo ago
        I didn't say anything about illegality, I'm speaking strictly in terms of the ethics of please stop shitting in the pool shame on you. Don't poop in the public swimming pool and don't feed perverse war games that result in children and their parents being maimed and killed.
  - mint5 6mo ago
    Info available to everyone? Yeah nope. That’s like saying the moon is cheese with a straight face. All anyone knows is that some bloke put money down an hour before the bet resolves. They don’t know squat about what info those betters have. Stop telling us the moon is cheese
- sneak 6mo ago
  Nobody is required to participate in these markets.
  - deleted 6mo ago
    [deleted]
  - naruhodo 6mo ago
    Nobody is required to use hacks in competitive multiplayer video games. You may choose to play fairly and be beaten over and over again. If there are no consequences for the cheaters, it becomes essentially mandatory, and that's without there being money on the line.
    - bongripper 6mo ago
      [dead]
- throw1234567891 6mo ago
  Yeah, if your “virtue” is “not being able to participate”.
mothballed 6mo ago
As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you. Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.
- amelius 6mo ago
  Why not get a real insurance, where it is actually verified that your house was bombed?
  - crazygringo 6mo ago
    Because there are many things where insurance doesn't exist.
    - deleted 6mo ago
      [deleted]
    - amelius 6mo ago
      Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.
      - crazygringo 6mo ago
        You can't just "work on that". Insurance works on repeatable, predictable risks based on models. You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
        maest 6mo ago
        There is a market for custom and rare risk insurance - it's called "surplus lines"
nojito 6mo ago
>Why would any non-insider participate in these markets? Because they are grossly mis-priced for anyone mildly informed.
- direwolf20 6mo ago
  Did you get rich off these markets? If not, how can you say it's true?
- stouset 6mo ago
  If this were the case, deeper and more informed pockets than yours would take the opposing position until there’s no more alpha to be had.
  - nojito 6mo ago
    Not true at all. A great example was this market from the most recent primary election. https://kalshi.com/markets/kxtxsenatedemturnout/voter-turnout-in-the-texas-senate-democratic-primary/kxtxsenatedemturnout-26mar03 https://kalshi.com/markets/kxtxsenatedemturnout/voter-turnou... Based on just simple math there was basically no chance of turnout being over 2.5m and yet the market for multiple days had the higher buckets at exorbitant prices.
    - wallst07 6mo ago
      The turnaround was 2.3m, I don't get your point. Texas doesn't require party affiliation.
      - nojito 6mo ago
        Correct and the higher brackets above 2.5m were at 50-70 cents each.
direwolf20 6mo ago
> Why would any non-insider participate in these markets? You’re just asking to get screwed. If people who do the obvious trades (sell oil right now - it's going down) lose money, all you have to do is do the opposite (buy oil right now - it's going down) and gain money. Is it not that simple? You will profit along with the insiders when Trump blockades the strait again, although you won't have such perfect timing.
- stouset 6mo ago
  Mind explaining to the class how you know how to make the same bet as the insiders without actually having insider information?

lostlogin 6mo ago

> The current setup does sort of seem like a tax on being stupid. More like a tax on being ethical or having any morality.

deleted 6mo ago
[deleted]
jaredklewis 6mo ago
What is unethical? The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone. Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do that, we might as well just ban prediction markets altogether. I don't have a strong opinion either way on that, but a prediction market without insiders is pointless.
- jackyinger 6mo ago
  Insider trading is unethical, and has long been recognized as such. It is outrageous for you to suggest that it is a good thing. It is not a free market if there is insider trading. If insiders are trading other market participants are by definition getting screwed by what was advertised as a fair, impartial system. You certainly wouldn't participate in a market where you did not think you had fair odds. Tho maybe you're inclined towards the rigging side of things. Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets?
  - jaredklewis 6mo ago
    > Insider trading is unethical It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information. Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the market was able to provide. In prediction markets, allowing insider trading would be disincentive to participation by non-insiders, which would be a good thing, because the market should surface the most accurate information as possible and insiders have more accurate information than non-insiders. > and has long been recognized as such. Prediction markets are in their infancy. They've only really existed for about a decade and even now are tiny compared with markets like commodities or equities. So I don't see how this could have been "long recognized." > It is outrageous for you to suggest that it is a good thing. This is not an argument. > You certainly wouldn't participate in a market where you did not think you had fair odds. Of course I wouldn't and I wouldn't advise anyone else to do so. But why would we want uninformed people participating in prediction markets? I don't think they should. What does "fair" even mean here? If Alice is more informed than Bob about X, she'll probably be better at making predictions about X. I guess it is "unfair," but what would the point of a prediction market be if we only allowed uninformed people to participate? Then it's more like a survey of what the average person thinks will happen, which is probably common knowledge, so we don't need a market to find that out. > Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets? Prediction market odds for elections and important world events are regularly quoted in the press and AFAICT seem to more accurate than pundits and and oped writers at predicting the future. A low bar, but still, if we are going to speculate about the future, we might as well see what actually informed people think.
    - 400thecat 6mo ago
      I completely agree with you. The only thing I would add is, that prediction markets are not necessarily oracles for predicting the future. They can just as well be used for hedging: imagine, hypothetically I really do not want Trump to win. I can bet on Trump, not because I want or expect him to win, but to hedge my position (perhaps my business would suffer if Trump wins)
- blurbleblurble 6mo ago
  "Information" is not neutrally reflective of some objective, deterministic reality. Processes involving information are slippery and reflexive, and that's the danger people are all but shouting for you to see. The feedback loops have extreme potential. The danger isn't in "exposing information" it's in people coercing reality to fit their bet. Peoples' lives are on the line. The wild thing is that prediction market dabbler rationalists who think they're betting on the outcome of a pre-written fiction story are actually just upping the reward for someone to come along and bomb people to death. Your participation is not neutral. You are culpable in the outcome of the situation you're "gambling" on which has not been determined yet and you are literally throwing fuel on the fire. No matter which way you bet it's fuel. I'm sorry, I don't believe you personally deserve it but for the betterment of the everyone we have no choice but to shame people like you (prediction market rationalizers) via downvotes and hot replies until you can see through the limits of your overly simple model of reality. I don't think you're a bad or stupid person, but when it comes to your views on prediction markets, they are very bad and very stupid. Thankfully you are not your beliefs and you are free to change them at any time. I beg you to reconsider this one.
  - wallst07 6mo ago
    This sounds like a poor attempt at attempting to be on the right side of morality through manipulation and shame. There is nothing here that tries to help someone understand your viewpoint. Let's start of with something simple. Should a single wager between two people be illegal, should sports betting at all be legal? Is it only illegal if one or more entities facilitate the bet?
    - blurbleblurble 6mo ago
      I didn't say anything about illegality, I'm speaking strictly in terms of the ethics of please stop shitting in the pool shame on you. Don't poop in the public swimming pool and don't feed perverse war games that result in children and their parents being maimed and killed.
- mint5 6mo ago
  Info available to everyone? Yeah nope. That’s like saying the moon is cheese with a straight face. All anyone knows is that some bloke put money down an hour before the bet resolves. They don’t know squat about what info those betters have. Stop telling us the moon is cheese
sneak 6mo ago
Nobody is required to participate in these markets.
- deleted 6mo ago
  [deleted]
- naruhodo 6mo ago
  Nobody is required to use hacks in competitive multiplayer video games. You may choose to play fairly and be beaten over and over again. If there are no consequences for the cheaters, it becomes essentially mandatory, and that's without there being money on the line.
  - bongripper 6mo ago
    [dead]
throw1234567891 6mo ago
Yeah, if your “virtue” is “not being able to participate”.

mothballed 6mo ago

As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you. Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.

amelius 6mo ago
Why not get a real insurance, where it is actually verified that your house was bombed?
- crazygringo 6mo ago
  Because there are many things where insurance doesn't exist.
  - deleted 6mo ago
    [deleted]
  - amelius 6mo ago
    Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.
    - crazygringo 6mo ago
      You can't just "work on that". Insurance works on repeatable, predictable risks based on models. You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
      - maest 6mo ago
        There is a market for custom and rare risk insurance - it's called "surplus lines"

nojito 6mo ago

>Why would any non-insider participate in these markets? Because they are grossly mis-priced for anyone mildly informed.

direwolf20 6mo ago
Did you get rich off these markets? If not, how can you say it's true?
stouset 6mo ago
If this were the case, deeper and more informed pockets than yours would take the opposing position until there’s no more alpha to be had.
- nojito 6mo ago
  Not true at all. A great example was this market from the most recent primary election. https://kalshi.com/markets/kxtxsenatedemturnout/voter-turnout-in-the-texas-senate-democratic-primary/kxtxsenatedemturnout-26mar03 https://kalshi.com/markets/kxtxsenatedemturnout/voter-turnou... Based on just simple math there was basically no chance of turnout being over 2.5m and yet the market for multiple days had the higher buckets at exorbitant prices.
  - wallst07 6mo ago
    The turnaround was 2.3m, I don't get your point. Texas doesn't require party affiliation.
    - nojito 6mo ago
      Correct and the higher brackets above 2.5m were at 50-70 cents each.

direwolf20 6mo ago

> Why would any non-insider participate in these markets? You’re just asking to get screwed. If people who do the obvious trades (sell oil right now - it's going down) lose money, all you have to do is do the opposite (buy oil right now - it's going down) and gain money. Is it not that simple? You will profit along with the insiders when Trump blockades the strait again, although you won't have such perfect timing.

stouset 6mo ago
Mind explaining to the class how you know how to make the same bet as the insiders without actually having insider information?