5 ms·

Prediction markets are useful to society for some things, sports is probably not one of them.

by dhruvyads 2mo ago

rvz 2mo ago
> Prediction markets are useful to society for some things Like what? Insider trading?
- mothballed 2mo ago
  Hedging events with poor or no insurance penetration. For instance, suppose you had to pre-pay in advance for a venue for Spanish soccer finals game party before you know if they go to finals, you might hedge your position by betting against them going to the finals, especially if the chance was very high as a small premium would protect you against a total loss. Another common one is war. Most insurances don't cover acts of war. Getting underwriting can be difficult especially for smaller amounts / people with little access to finance industry. Betting on war can hedge real estate or other exposed holdings.
  - recursivegirth 2mo ago
    I fail to see how either of those are useful or beneficial to society.
  - orsorna 2mo ago
    It falls apart if the event being insured can be influenced by at least one person. Because if one person can influence that event, then there is an avenue for that event's to be modified.
    - orsorna 2mo ago
      *event's probability
  - mingus88 2mo ago
    Ah yes, real estate speculation. What a boon for society this betting market provides.
  - Craighead 2mo ago
    The disconnect of ivory tower tech workers from normal people has never been more apparent.
- dhruvyads 2mo ago
  For example predicting whether a government infra project (california rail, etc) will complete under budget and within stated timelines. If the probability of this happening is low on prediction markets, corrective action can be taken. More generally, I think prediction markets can significantly improve capital efficiency by being a leading indicator of misallocation.
  - dhruvyads 2mo ago
    You can also imagine using such prediction markets to incentivize speed + proper allocation by pre-purchasing "Yes" and awarding these shares as part of the involved people's compensation.

Prediction markets are useful to society for some things, sports is probably not one of them.

rvz 2mo ago

> Prediction markets are useful to society for some things Like what? Insider trading?

mothballed 2mo ago
Hedging events with poor or no insurance penetration. For instance, suppose you had to pre-pay in advance for a venue for Spanish soccer finals game party before you know if they go to finals, you might hedge your position by betting against them going to the finals, especially if the chance was very high as a small premium would protect you against a total loss. Another common one is war. Most insurances don't cover acts of war. Getting underwriting can be difficult especially for smaller amounts / people with little access to finance industry. Betting on war can hedge real estate or other exposed holdings.
- recursivegirth 2mo ago
  I fail to see how either of those are useful or beneficial to society.
- orsorna 2mo ago
  It falls apart if the event being insured can be influenced by at least one person. Because if one person can influence that event, then there is an avenue for that event's to be modified.
  - orsorna 2mo ago
    *event's probability
- mingus88 2mo ago
  Ah yes, real estate speculation. What a boon for society this betting market provides.
- Craighead 2mo ago
  The disconnect of ivory tower tech workers from normal people has never been more apparent.
dhruvyads 2mo ago
For example predicting whether a government infra project (california rail, etc) will complete under budget and within stated timelines. If the probability of this happening is low on prediction markets, corrective action can be taken. More generally, I think prediction markets can significantly improve capital efficiency by being a leading indicator of misallocation.
- dhruvyads 2mo ago
  You can also imagine using such prediction markets to incentivize speed + proper allocation by pre-purchasing "Yes" and awarding these shares as part of the involved people's compensation.