Comment by sterlingcrispin
20 hours ago
Yes exactly.
The bot has zero risk management and I have a strong disclaimer on the github it is essentially a meme.
73% of all polymarkets do resolve to No though.
There's a good dataset on huggingface if you wanted to do some data science
It doesn't matter if 99% resolve no, if they're priced appropriately betting no on every single one won't make you money.
If they're appropriately priced, you can't win money at all, unless you have insider knowledge.
The purpose of prediction markets is to communicate insider knowledge.
25 replies →
Yes. And indeed, when aggregated and averaged across all betters, nobody makes any money.
The question isn't what percentage of bets resolve to no, but whether there is a consistent bias in the prices away from the fair price, which has an expected value of 0, and what direction that bias is in.
I hate that many people or even the news and scientists have already started to see the odds of prediction market as fact.
I'm sure in the near future, policy decisions or war strategies will be decided by prediction markets' odds, if they are not already being used.
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That's a massive "if".
Totally, that's the entire conjecture of this bot. My point is just that the odds of the underlying events are irrelevant, what matters is if they're matched with the betting price
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Of course, they were just explaining the basics of statistics.
> 73% of all polymarkets do resolve to No though.
I bet the average price for a no bet across these markets is 73 cents.
A persistent bias in prediction markets is pricing very non likely events as slightly more likely than they are. ie; a 1% event priced at 4%, etc, because people like to bet long shots.
Whether there is enough of a predictable bias there to snag enough low return high probability bets to beat the vig and not shift the markets I have not looked into in any way,but it is a known bias with them.
The real money to be made in prediction markets is being the ones with the actual knowledge which is arguably why they are useful and why for some topics, people find them abhorrent.
I think you get less return on investment for the same absolute edge in percentage points. A 1% event priced at 4% gets you a 3/96 = ~3.1% return. A 53% event priced at 50% gets you a 6% return. You nearly double your returns by investing in the latter market even though they're both off by 3 percentage points.
If the market isn't resolving soon, the small return might not be worth it.
71 cents*, the bookie gets a cut either way it goes.
This is the truth of the matter, ultimately nobody wins except the bookie, who profits either way.
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Even if a cut isn't taken and there aren't other inefficiencies, any money tied up in long-term predictions is earning 0% instead of whatever the current risk-free rate of return is.
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Wouldn't it be 75 cents then? (The cut would come out of higher pricing, since the payout is always a dollar).
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Untrue for polymarket. True for kalshi. No bookie fees on polymarket
6 replies →
It's not. But also a lot of those stats thrown around are misleading.
If the average no costs less than 73 cents, but the 73% of all polymarkets resolve to No, that would imply that the nothing-ever-happens strategy here is profitable. Are you claiming that it is profitable? Or are one of those premises incorrect?
Edit: conversely, if the average no costs _more_ than 73 cents, but the 73% of all polymarkets resolve to No, that would imply that an everything-always-happens strategy is profitable (neglecting slippage)
2 replies →
Are you willing to pay $.27 for that perspective? Sounds like we have a market!
> I bet the average price for a no bet across these markets is 73 cents.
Behavioral economics has already answered the question of whether humans are, on average, perfectly rational economic actors. They are not.
To the contrary, there is substantial evidence indicating a meaningful number of humans will mis-estimate the likelihood of uncommon future events.
It doesn't matter if a vast majority of people are not rational economic actors. It only takes 1 rational actor with enough capital to take the other side of all the bad bets, and the market will be priced correctly even if the other 99 people are irrational.
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Well, if the price would be incorrectly set, then bots like this one would make money, which would in sufficient time cause the market to adapt and the average price would change so the bot doesn't work.
That doesn't matter so much when it happens in a place where people can make money from other people's irrationality. Even if there are a bunch of irrational people placing bad bets on uncommon future events, rational people looking to make a buck will take the other side of that bet, until the price is sensible.
The alternative would be that there's a bunch of free money sitting there waiting for someone to decide to pick it up, and nobody is, not even you.
1 reply →
I’ll take the “no” side of that bet ;)
Why would outcomes match perceptions?
The whole premise of gambling is that they don't
The whole premise of prediction markets is that the few people whose perception do match outcomes make bets to push the money-weighted average perception toward outcomes. If perceptions still don't match outcomes at that point, average return is 0 minus transactions, with high variance.
10 replies →
But in aggregate they might.
its funny, tells you it barely works, and its a good meme.
Successful project imo.
In addition, it serves as a good template for writing your own polymarket bot with whatever logic you want.
For the uninitiated, I believe the meme comes from Reddit, where there is one criticism subreddit, r/ThatHappened where people accuse other Redditors of making up stories of events that never actually happened, and then a meta-criticism subreddit, r/Nothingeverhapens, where people make fun of r/ThatHappened as conspiracy theorists who think everything posted online is fake. Hard to tell how much of each subreddit is trolling and how much are people earnestly criticizing each other.
It comes from 4chan, like all decent memes
https://knowyourmeme.com/memes/nothing-ever-happens
Does the existence of that knowledge make a slight bias lowering the odd on no? I could fork this and with a 1 line change earn dozens of dollars as long as I don't tell anyone what that secret change is.
No, I think the bias is really just a reflection of how propositions are phrased. We could imagine a mirror-world prediction market that offers all the same propositions, but phrased oppositely: e.g. a market in "person X will die by Y date" becomes a market in "person X will survive until Y date". And in that market, we would see a bias towards propositions resolving as Yes.
reminds me of that one story when someone won a poker bot competition by always going all in
> 73% of all polymarkets do resolve to No though.
I wonder what it means exactly. Typical Polymarket looks like this:
X happens before May. [Yes][No]
X happens before June. [Yes][No]
X happens before July. [Yes][No]
...
So even if X ended up happens in December, it's still 12.5% Yes and 87.5% No?
That's one event containing three markets, each yes/no. And in a way each market is two separate markets, buy/sell yes and buy/sell no, but they mirror each other.
I understand that. That's not my question tho. I am asking for the exact meaning of the 73% number.
And how do you report it in May?