this means the true probability is farther from 50% than the price makes it seem.
The calibration is better at 1⁄4 of the way to close:
you might think it’s because markets closing near 20% are weird in some way (unclear resolution) but markets 3⁄4 of the way to close also show the s-curve. Go see for yourself.
I left a comment there on why I think this might be the case: the AMM is inefficient, limited balances, people chasing higher investment returns elsewhere.
I’m curious what people think. And also curious if polymarket or the indian prediction markets also have a similar curve.
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should I make a real post for this? to-do’s are: look into polymarket data (surely it exists? it’s blockchain) and fit a curvy formula to this.
The s-curve in prediction market calibrations
https://calibration.city/manifold displays an s-curve for the market calibration chart. this is for non-silly markets with >5 traders.
This is what it looks like at close:
this means the true probability is farther from 50% than the price makes it seem.
The calibration is better at 1⁄4 of the way to close:
you might think it’s because markets closing near 20% are weird in some way (unclear resolution) but markets 3⁄4 of the way to close also show the s-curve. Go see for yourself.
The CSPI tournament also exhibited this s-curve. In that article it points out predictit does too!
I left a comment there on why I think this might be the case: the AMM is inefficient, limited balances, people chasing higher investment returns elsewhere.
I’m curious what people think. And also curious if polymarket or the indian prediction markets also have a similar curve.
---
should I make a real post for this? to-do’s are: look into polymarket data (surely it exists? it’s blockchain) and fit a curvy formula to this.