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locallost 2 hours ago

I don't think that's surprising because the alternative would be that some people are able to predict the future. Whatever strategy one might figure out that works is long term destined to fail, as other people start using them. The only real way to make money there is by providing liquidity since it's a zero sum game. For the stock market this is not true because it's not zero sum, it grows over time.

tsimionescu 8 minutes ago | parent | next [-]

There are some bets on prediction markets where the future is either already known or in the control of people who may be participating in the market. For example, when people bet on how long the next presidential briefing will be, it doesn't take a prophet to predict this, anyone who organizes said briefing can control it (at least with a very high probability).

So, the question becomes "what is the preponderence of such bets" and "how many people with control or knowledge of bet outcomes actually participate in the market" - not "can some people see the future of any bet better than others".

cortesoft an hour ago | parent | prev | next [-]

There is alternative to being “able to predict the future”, which is “I already know the future” or “I can change the future”

mathgradthrow 36 minutes ago | parent [-]

Someone flips a coin and looks at it, what orders are you willing to put in?

The potential for insiders should be represented by a complete loss of liquidity.

tsimionescu 7 minutes ago | parent [-]

And yet, many people bet on things like the duration or contents of press conferences, of pre-taped shows, etc.

Retr0id 2 hours ago | parent | prev | next [-]

"predicting the future" and "correct analysis of all available information" often aren't all that different.

glitchc an hour ago | parent | next [-]

A sufficiently large market is indistinguishable from Brownian motion.

11101010010001 2 minutes ago | parent [-]

That's a model.

AnimalMuppet an hour ago | parent | prev | next [-]

From Schlock Mercenary (quoted from memory, may be inexact):

"You cannot see the future. All we are given is the present."

"Of course. But if you look closely at the present, you can find loose bits of the future just laying around."

dheera an hour ago | parent | prev [-]

Not really. Not all players in prediction markets are rational players. A good chunk of it are there for entertainment, and analyze things incorrectly; you can take the other side of those trades, and you won't need to predict the future.

Retr0id 11 minutes ago | parent [-]

Deciding that someone else's prediction is wrong is a prediction in and of itself.

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vcf 2 hours ago | parent | prev | next [-]

Yes, but the alternative (that some people are very good at forecasting) is also plausible. It's also useful to have a good prediction model and timely data sources when providing liquidity. We also find that some of the "biggest losers" also provide liquidity; they just aren't as good at it.

dheera an hour ago | parent | prev [-]

The stock market is arguably zero sum as well, just that directionally betting on the US has generally worked during the golden years of the US economy.

The stock markets of the world aren't a money printer.

cluckindan 6 minutes ago | parent [-]

They can be in cases where investment lenders don’t have 100% capital requirements, but that’s generally no different from other banks.