[FRIAM] betting markets

[steve smith]

I think both polls and "markets" have a lot of self-selection bias...  
what motivates folks to answer a poll and what motivates them to "buy 
in"?   Supposedly pollsters *can* try to wash that bias out, but their 
"washing method" seems likely biased as well.

I am inclined to believe in the dynamics of "free markets" on principle, 
but in this case, the self-selection bias likely overwhelms the 
"efficient market hypothesis" aspect?

Why would "wealthy bastards" want to manipulate these markets with high 
buy-ins?    Firstly, wealth is exponentially distributed so no matter 
how much I influence a market with my "vote", someone else can overwhelm 
it with their own.  If the true meaning of a market is truly speculative 
based on likely returns from the market, there are dynamics around 
manipulation, but if the real goal is to influence opinion and 
confident, I can see why "wealthy bastards" might want to contribute to 
the illusion of a Trump Supremacy/Ascendency, most especially if it only 
involves spending one drop of sweat off of their suntanned scrotal pudenda.

Mixing the two, in a no limit stakes market, why not run Trumps bias up 
with you spare change, then place more significant bets "against 
yourself" late in the game, either evening out the stakes/rewards to 
gain advantage or to break even up to whatever influence their offerings 
generated?

  As an aside, I'm not sure what a *true* free market looks like and 
given the range of human motivations and desires, I'm not sure we want 
to let he raw id (or worse, amplified by mob-entrained dynamics?) run 
free.  I'd claim sub-?sapient? (think Swarm dynamics) life runs on 
whatever the equivalent of the collective coupling of ids might be in 
non-human/non-sapients?   Once we started "self-regulating" at a higher 
level than personal id/collective id we started a habit that while 
perhaps highly adaptive, one we can't backslide on too well without 
being at huge risk?   We are addicted to "governance" for better or 
worse, and I'm hopeful that we might be able to make a phase transition 
from Churchill's "worst form of government except for all the others we 
have tried" (i.e. Democracy of some stripe?) to something more better 
(not sure what the fitness function "more better" actually describes 
though).

I find these markets vaguely interesting (moreso when they were new ?20+ 
years ago)... and I'm glad to see you (Glen) putting some skin in the 
game, I do think that shifts my perspective when I do so.   I bought 
into Blockchain through Cardano/Ada because I like the aspirations of 
the project beyond/outside-of CryptoSpeculation...  and my (small) stake 
helps me be reminded to follow it's evolution even when it feels a 
little boring.   I can imagine doing the same with the voting markets... 
but they vary enough I don't know which to buy into.   The Trump-leaning 
ones seem like a fools-game to me (for Tump Fools), but I would have bet 
on Hillary 8 years ago (even if I didn't vote for her).   The one 
clearly unknown factor in Trump's favor is that he is hugely more likely 
to arrange to get inaugurated without winning either the popular or the 
electoral college vote...   is the variance from 50/50 in the markets 
perhaps reflecting that?


> Both Kalshi <https://kalshi.com/markets/pres/presidential-elections> 
> and PolyMarket <https://polymarket.com/elections> skew heavily for 
> Trump. I'm like ... 51% confident that Harris will win (barring legal 
> shenanigans).  I figured I'd go ahead and participate. So I bought $50 
> worth of Harris "yes". And I've heard that there may be some rich 
> people manipulating the market. It's not clear to me why they'd do 
> that. But like Musk buying Twitter, it's clear that "disposable" 
> income takes on a deeper meaning when you've got so much of it. But 
> barring market manipulation: a) do y'all think the markets have more 
> "information", whatever that means, than the polls? And b) are y'all 
> participating in any of these markets?
>