Comment by jvanderbot
1 day ago
That's the actual point. Everyone else is there to make money gambling, but the whole premise is to incentivize people with secret information to share it anonymously with the public, and take a reward for doing it.
All without traceability or secret drops or whatever.
POSIWID
> POSIWID
Everyone can make up a silly purpose.
Against POSIWID: https://www.astralcodexten.com/p/come-on-obviously-the-purpo...
Oh, I suppose one could interpret it as literally as possible, and arrive at that essay's conclusion.
I have always considered the following to be basically synonymous:
* In the absence of info, consider the intended output of the system to be what it is measured to be
* The output of the system is best determined using observation vs reasoning
Most of the examples there are moreso about two systems colliding. Yes, the purpose of the military is to disable the enemy and by god they are disabling a lot of each other so much so that they don't seem to be doing much else.
Except the bus system, in which the purpose is indeed to turn fuel into exhaust, because the busses move whether they are full or not. The purpose of busses is to drive around, and it so happens people like to use them. If the purpose of busses was to shuttle people around, it could be done several other better ways.
If the purpose is to gamble, it can be done many other ways. This system seems purpose-designed (or purpose-emergent) to coax out secret information in the form of large bets.
(The Purpose Of a System Is What It Does)
> All without traceability or secret drops or whatever.
Well, that's not an argument against prediction markets.
They could have exactly the same amount of traceability as regular financial markets, and still work well as prediction markets.
The market can only resolve based on public information, so it could only incentivize revealing information that is already destined to be imminently revealed. Furthermore, it doesn't incentivize sharing that information with enough lead time to actually take action based on that information; the opposite is actually true, insiders are incentivized to wait until just before the event to make their trade, meaning that the public gets no actionable information in practice. And that's assuming that you can distinguish an insider from someone lying for the sake of market manipulation.
Untrue. Insiders are incentivized to trade when they can buy at the lowest price. That could be at any point up to the event.
> [...] insiders are incentivized to wait until just before the event to make their trade, [...]
What are you basing that one? And how is this supposed to work?
If you are an insider the incentive is to trade as soon as possible, lest some other insider beats you to the punch, or some conventional leak (or investigative journalist) spoils your party.
This is easiest to see, when there are multiple unconnected insiders: the first to trade wins. But even if you merely suspect another insider might exist, you have an incentive to trade first.
> And that's assuming that you can distinguish an insider from someone lying for the sake of market manipulation.
That's exactly the same as any other noise trader in financial markets, yes. Nothing specific about insider information.
Without additional signals, you can just as well use it to manipulate markets.
E.g. there's a 1-to-1000 bet for $1m today on Trump falling down the staircase. So markets read this and go crazy, buying up the stock. The next day, nothing happens and the markets go down. But somebody could have made billions betting on that.
> But somebody could have made billions betting on that.
Just because there's a small bid for 1-to-1000 on market, doesn't mean you can buy billions worth of contracts at that price.