Polymarket

Late night rant for people who think that prediction markets odds have predictive power in real life - very unlikely and thinking of them beyond casinos is not helpful. 

From an interesting research paper the team at @mbd looked at to understand how to best use predictions markets data.

« We show that the prices which emerge from a market populated by a class of distinctly inhuman agents, Zero-Intelligence agents with diffuse beliefs, replicate the findings of empirical market studies. We use this result to argue against the prevailing descriptive theories of price formation in prediction markets, which have stressed the role of expert, rational participants. »

This is important to know if you are using these markets to hedge or if you think something is baked in the cake and « no need for me to go vote » 😬

I might be wrong on this but still believes we are reading too much into the efficiency hypothesis of prediction markets because as an industry we need a win 🤷🏻‍♂️

It is great entertainment and a faster medium to gather information when “experts” (ehm’inside traders) are involved but in general zero knowledge agents do explain most of the price action as in the paper linked…

And in cases where election can be cheated but hard to prove, oracles are in trouble and resolution is a centralized mess.