Comment by jpmattia

1 day ago

Something that appears to be missing: Certain events attract "advertising" types of bets. E.g. There is value in making a candidate appear to be a leader, so dedicating dollars to swinging the market is more of a form of advertising than an intelligent bet.

So it would be interesting to measure the inefficiencies of various bets vs the total market value in that bet.

e: Although full disclosure, I did not pick apart the entire paper. Maybe it's buried in there.

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jpmattia

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jonbecker  1 day ago

super interesting, re: spending money to move the line is just another form of non-profit-seeking "consumption."

i didn't filter for manipulation specifically, but i did find that politics was actually one of the most efficient categories (only ~1% maker/taker gap), suggesting the market absorbs those flows pretty well.

  • jpmattia  1 day ago

    > but i did find that politics was actually one of the most efficient categories (only ~1% maker/taker gap)

    I confess I'm surprised by that result in particular. I realize your results are for Kalshi, but ISTR some reports from the presidential elections on Polymarket.

    But more generally: When you say there is "only a ~1% maker/taker gap", is that weighted by the size of the bets? or is it averaged over the number of bets placed?

    In any case: Thanks for a very interesting paper!