Comment by some_random
17 hours ago
It doesn't matter if 99% resolve no, if they're priced appropriately betting no on every single one won't make you money.
17 hours ago
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.
The purpose of any price-based system is to communicate knowledge, not necessarily insider knowledge.
There are actually two theories on insider knowledge. One states that allowing insider trading is beneficial, as it allows prices to better match the underlying reality, the other states that this discourages non-insider trading, which actually makes the prices worse. Stock markets lean heavily towards the second theory, while prediction markets seem to be leaning towards the first.
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https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
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and facilitate insider trading, like how do people miss that part
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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.
They're far from facts, but have an important advantage over most other sources: the bettors are motivated to predict truth.
News sources are motivated to get clicks, to appeal to certain audiences, and to retain tribal customers. None of these create incentives for truth. You can seek out smart, well-informed and principled journalists who will prioritize truth-seeking over money-making. There are some. But the fact remains you are relying on character to override incentives. With prediction markets, incentives and truth are naturally aligned. This makes them a powerful and valuable resource imo, even if there is a lot of scumminess that comes along for the ride. The insiders, more than anyone, are contributing to the truth signal.
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See also: https://mason.gmu.edu/~rhanson/futarchy.html
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
It is not the entire conjecture of this bot. The dev claimed a percentage of bets that win with “no” and wrote some code to fuck around.
You though, are claiming that the market is perfectly priced, or should be, such that this strategy won’t work. It’s pretty hard to balance the odds of an animal seeing their shadow vs the expected strike price of the nasdaq. It’s clear you’re not familiar with betting markets, which is in your best interest most likely, but that’s not how this works.
You’re arguing against yourself… against a point nobody made but you.
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Of course, they were just explaining the basics of statistics.