I would strongly disagree. People owning the teams fix the entire system
You agree that the gamblers are fixing the matches. And I don’t disagree with you that owners are fixing the system.
Investors as opposed to gamblers fix thing on a much bigger scale and normally through politics. Agricultural subsidies? High import tariffs? That’s all the system being fixed for someone’s advantage.
You’re not wrong.
But whether or not investors and gamblers have equivalent senses of fair play, the latter is more likely to seek unlawful opportunities for profit. My point (5) above may have seemed silly, but there is a real difference between what a bank will do to you to recover money owed and what Charlie who works out the back of a liquor store will do, even though they have one incentive in common. And there is a big difference between what Aubrey McClendon will do to make sure his “bets” on oil wells pay off and what Joe who bets the fights will do to make sure his boxer wins.
And if Joe stumbles upon a group of people betting on the level of synthetic estrogen found in the metro’s tap water at a certain date...well, birth control pills are pretty cheap and impossible to trace.
But whether or not investors and gamblers have equivalent senses of fair play, the latter is more likely to seek unlawful opportunities for profit.
I still do not agree. I think there’s some confusion about cause and effect going on. Gambling used to be mostly illegal with all the consequences thereof—that’s where your “Charlie who works out the back of a liquor store” meme comes from.
Things have changed. Las Vegas and Indian casinos are full of law-abiding middle class people who want a little excitement and not looking to get into any trouble. They are gamblers, but they are not going to break anyone’s legs.
In any case, we’ve strayed far afield from the original question of whether markets where you can bet on catastrophes are a bad idea. Do you still think they are?
I agree that there’s a mostly safe and clean (but too often smoke-filled :( )space for gambling in the US now. There’s still a lot of shadiness in sports gambling, even though there are places to bet legally on games.
This has been a great exchange for me, and I appreciate it, so thank you! It’s helped me clarify my thinking on prediction markets.
I think niche prediction markets interested mostly in existential risk and AI are likely to be too small and eccentric to be good predictors, and that truly massive global predictions markets will involve shadiness. But I can see something in between, with real capital and a broad set of well-informed bettors, and some sort of mechanism to identify and track bettors, providing good information on near term events with little downside.
What do you think are the best and worse case scenarios for prediction markets?
What do you think are the best and worse case scenarios for prediction markets?
I don’t think that long-term prediction markets will have earthshattering consequences given that they will complement the existing financial markets.
Worst case: the US government (and others) continues to insist they’re illegal gambling, they don’t take off, nothing happens. I’m not considering movie-type scenarios in which an evil mastermind manipulates the prediction markets to fool the good guys and TAKE OVER THE WORLD!!!
Best case: the prediction markets do take off, become popular, continue to be independent and reasonably resistant to manipulation, and provide valuable data about the revealed predictions of the public.
You agree that the gamblers are fixing the matches. And I don’t disagree with you that owners are fixing the system.
You’re not wrong.
But whether or not investors and gamblers have equivalent senses of fair play, the latter is more likely to seek unlawful opportunities for profit. My point (5) above may have seemed silly, but there is a real difference between what a bank will do to you to recover money owed and what Charlie who works out the back of a liquor store will do, even though they have one incentive in common. And there is a big difference between what Aubrey McClendon will do to make sure his “bets” on oil wells pay off and what Joe who bets the fights will do to make sure his boxer wins.
And if Joe stumbles upon a group of people betting on the level of synthetic estrogen found in the metro’s tap water at a certain date...well, birth control pills are pretty cheap and impossible to trace.
I still do not agree. I think there’s some confusion about cause and effect going on. Gambling used to be mostly illegal with all the consequences thereof—that’s where your “Charlie who works out the back of a liquor store” meme comes from.
Things have changed. Las Vegas and Indian casinos are full of law-abiding middle class people who want a little excitement and not looking to get into any trouble. They are gamblers, but they are not going to break anyone’s legs.
In any case, we’ve strayed far afield from the original question of whether markets where you can bet on catastrophes are a bad idea. Do you still think they are?
I agree that there’s a mostly safe and clean (but too often smoke-filled :( )space for gambling in the US now. There’s still a lot of shadiness in sports gambling, even though there are places to bet legally on games.
This has been a great exchange for me, and I appreciate it, so thank you! It’s helped me clarify my thinking on prediction markets.
I think niche prediction markets interested mostly in existential risk and AI are likely to be too small and eccentric to be good predictors, and that truly massive global predictions markets will involve shadiness. But I can see something in between, with real capital and a broad set of well-informed bettors, and some sort of mechanism to identify and track bettors, providing good information on near term events with little downside.
What do you think are the best and worse case scenarios for prediction markets?
I don’t think that long-term prediction markets will have earthshattering consequences given that they will complement the existing financial markets.
Worst case: the US government (and others) continues to insist they’re illegal gambling, they don’t take off, nothing happens. I’m not considering movie-type scenarios in which an evil mastermind manipulates the prediction markets to fool the good guys and TAKE OVER THE WORLD!!!
Best case: the prediction markets do take off, become popular, continue to be independent and reasonably resistant to manipulation, and provide valuable data about the revealed predictions of the public.
Nothing horribly exciting here :-)