Prediction markets: can betting be good for the world?

this is a nice thought, but it has some pretty major flaws.

as for what those are, i'll only say one word. dogecoin.

I love the thumbnail- S T O N K S

Wouldnt such markets be speculative, because you can sell of your stocks? So the market reflects what people think what people will think about the events, it doesnt reflect what people actualy thing about the event.

Oof, that FTX reference hits different in this future

Good Way

There's a lot of issues with prediction markets that weren't mentioned.

The first is they're subject to human rationality. The video uses the example of 2008 on how the betting markets outpredicted Nate Silver... But no mention of 2020 where they failed miserably. So miserably, they were still predicting a significant chance (around 20%) of Trump still winning even as Biden was declared the winner by multiple outlets.

The second issue stems extends from that. A prediction market's predictive power is limited by the knowledge of its participants. This can create a massive blindspot with knowledge only held by 1.those who simply do not have the funds to participate and 2. Those so risk adverse that they'll never participate in a betting market.

2 ties with 1 because that massive error was caused directly by the demographic shift of bettors between those two elections: the nature of elections post 2016 brought in bettors that often used magical thinking compared to 2008's election being less emotionally charged for those participants.

Very interesting valuable. Thanks for sharing.

the market most peaople use to win is the corner and most precisely the plus 7.5 goals

I don’t trust the prediction markets. They could easily be manipulated to try to convince the public that a particular politician will win or lose in a landslide, affecting the donations to their campaign. (Self fulfilling prophecy)

me with my crystal ball: finally, money.

Интересно!

nice video

I think the biggest problem with predicitve markets comes with the fact that every trader wants to invest in a "sure thing," like housing for example. Unfortunately the demand in any "sure thing" will artificially inflate its value, and any "sure thing" can only ever actually be sure if the commodity it represents is actually a necessity, thereby inflating costs of things people need. Ofc this is where nationalisation of human necessities and natural resources, and market regulation are aupposed to come in but don't

What about actors that invest in the outcomes of said predictions. Guaranteeing their profits.

I see prediction market use case possibilities in the law enforcement arena. Like the wild west and bounties. Also voting and polling. Coinbase delisted Auger. It's a shame because I think it could bring accountability back to the world

in my creation it only goes up

On the topic of "rigging" outcomes for profit, I see two broad categories of solution.
1) the top-down approach: platforms prohibit "riggable" contests or annul "rigged" outcomes.
2) the bottom-up approach: The market prices in the possibility of "rigged" outcomes into their probabilities. This one is more interesting for me.
With bottom-up, each outcome would have a maximum payout that could be extracted from "rigging" it; The maximum payout cannot exceed the total pay-in of all parties.
As the payout rises, we should expect the market to increase the likelihood of the "rigged" outcome. All else equal.
Also, buying tons of "yes" shares in the rigged outcome would increase the price of "yes" shares on the market. That increases your starting capital requirements and hints to the market that funny business is a-foot.

What about market manipulations? Pump and dump what comes to mind. My nightmare is the case when dependencies reverse and the only reason why something has happened is because prediction markets predicted so.

Omg very nice great video, I subscribed

I'm engaging

///////////you are forgetting about the idea of selfd fufilling prophecies since people are incentivised to make their prediction come true.

Awesome video!

Prediction

Yes


No


Is that Carmen San Diego in a Cameo during this video?

I really love this channel

Vegas bookies and prediction markets are sometimes quite at odds with one another. Makes arbitrage possible. Also predictict sometimes waits weeks or months long after an outcome is apparent before making payouts you can sometimes pick up winning votes to for a few cents less than the payout treating it as a short term loan.

Manifold Markets started just after this video was published and uses fake money really effectively.

Play money markets are no joke! In Scott Alexander's prediction contest, Manifold and Metaculus beat 506 out of the 508 human participants at predicting the events of 2022. Using fake internet points also solves some of the problems the video rightly mentions: regulation, equal access, hedging, and manipulation.

I do not undestand why they are so unpopular. I just heard about them recently. WHile sportsbetting, poker, trading stocks is popular.

Ah yes, FTX.... that didnt age well

Folks, Kalshi is the first regulated prediction market in the US.

Didn't get a single idea, anyway... Upvoted, love these animations.

Who's watching this aftr downfall of FTX?

FTX doesn't offer much except laughs these days 😂

One problem this only works if people are rational actors or are closer to truth then experts and i think psychology has something to say about that
it could be possible that a prediction market is more accurate then experts but human bias is gonna make it a close battle i predict ;)

This video is 69% nice

This channel is amazing, It will definitely reach million subscribers in future!

Quick, I don't have much time. I come here to adjust your predictions about FTX. I hope it is not too late.

That ftx comment aged poorly

The ftx subtle publicity and finance support aged like milk

Great themes! Just keep up ❤❤❤

Seems like voting with extra steps

"can betting be good for the world?"
before watching the video - no
after watching the video - no

Thank you for sharing your gift of animating and explaining! I am very interested in the rational movement but have found very hard to get into personally, let alone be able to share its content with those who would not naturally stumble upon it themselves.

I find the idea of Gendo Ikari being a professional market predictor amusing.

How can prediction markets be abused?