Comment by epolanski
7 hours ago
There is no evidence that people betting on whether Iran will strike Israel on March 15th has any benefit. Who would be the beneficiary of that?
Are you gonna tell me residents in Tel Aviv will be able to hedge their chances of surviving tomorrow?
Nor there's evidence that providing information about the fact that US will strike Venezuela does it either.
What value any of that has? None, especially considering the perverse incentives on the other side of acting on the outcome probability for financial gain which has already happened. US executive insiders have definitely bet on US attacking Venezuela on Polymarket.
You see this as "information discovery", I see it as the fact that I can lobby for dangerous events to happen just for financial gain.
Future markets have some value in some scenarios where you can hedge the outcome.
E.g. a farmer hedging crop prices can de risk his operations.
There is a hedging and the hedge works as insurance.
What's exactly the value of betting on elections or military strikes? What's being hedged?
How can you not see the financial incentives?
We have a long history of regulating both futures, derivatives and betting for very specific reasons.
But now we've relabeled it all as information gathering and price discovery.
How can you not see how the financial incentives here are speedrunning terrible events to happen?
I'm gonna rephrase it like that: would you like for a contract to exist on whether you'll be sent to hospital tomorrow in a crash accident?
Are you gonna tell me: "well, it's information discovery and it's valuable that I can wake up knowing the odds have increased!" while ignoring that there are now people out there financially motivated to make this happen?
I think people & companies get value from these markets because they are able to plan on the basis of accurate forecasts for scenarios like potential wars and election results.
I agree that these markets also create bad incentives, I just think that on net the information provided tends to be more valuable.
> Are you gonna tell me residents in Tel Aviv will be able to hedge their chances of surviving tomorrow?
Yes, of course! If you had some advance warning your home town was likely to be struck with missiles soon, are you seriously saying you can't think of a single thing you could do to prepare? I would, at a minimum, make sure I was stocked up on first aid supplies, water, and food that I could eat without needing power or gas to cook it.
And don't you see the other part of the medal?
That there are economical incentives to make it happen just to make money?
Such events have little-to-no "wisdom of the crowds" those events decided by a handful of people. And their consequences catastrophic.
What if there was a derivative for whether you will be hit by a car tomorrow?
What would you say if there was a contract on whether your county will burst in flames this month?
Are you happy because you can hedge this event, or don't you realize the obvious peril?
> That there are economical incentives to make it happen just to make money?
I don't see how there is. The liquidity in a prediction market is not high enough to compensate for the expense of going to war.
The war was going to happen irregardless of the prediction market. The prediction market only let us know when it was going to happen with some hours to spare.