[FRIAM] betting markets

Tue Nov 5 13:11:13 EST 2024

Perhaps my best academic friend is an economist and I have been trying for years to get him to team teach an economic anthropology class; one facet of which would be an examination of how markets are deeply embedded in a cultural context and the only way to get to an "efficient market" and associated equations is to ignore 90% of the data and variables at play.

He has resisted for thirty years, but agreed next to next fall—undoubtedly because he is planning to announce his retirement in the fall as well.

davew

On Tue, Nov 5, 2024, at 11:11 AM, glen wrote:
> The efficient market hypothesis is so obviously false, I can barely say 
> the phrase without being triggered. A friend of mine texted me the 
> other day suggesting that "cut" is a metaphor for analysis (as in 
> "cutting through the bullshit") and that "bullsh¡t" is a metaphor for 
> misleading rhetoric. But I claim those are not (no longer) metaphors. 
> "Bullsh¡t" isn't grounded to "bull sh¡t". And "cutting" is polysemic. 
> In "a cutting remark", "cutting" isn't grounded to what you do with 
> knives and butter or chainsaws and trees. It's grounded to criticism. 
> Now, I know this concept of re-grounding is probably limited to me. But 
> I'm pretty sure I'm right here, and anyone who disagrees will 
> eventually come around, in the long run. 8^D If you think "bullsh¡t" is 
> a metaphor mapping bull feces with questionable rhetoric, you're just 
> plain weird.
>
> Similarly, who thinks these markets incorporate *all* the salient 
> variables? Nobody, right? And is the domain of variables even stable? I 
> mean, don't meme stocks demonstrate that the domain shifts (can be 
> shifted)? Even if all the salient variables were included, the 
> weighting of those variables could shift.
>
> On 11/5/24 08:13, steve smith wrote:
>> And then we have the artificial pricing of Truth Social/Trump Media...
>> 
>> I saw a headline claiming a 12% jump in prices today based on ?speculation? or aspirational ideation...
>> 
>>     https://www.politico.com/live-updates/2024/11/04/2024-elections-live-coverage-updates-analysis/truth-social-00187158
>> 
>> I don't take this enthusiasm/appetite for DJT stock as an actual indicator for his likely success in the election, just for the headiness in his cult following.
>> 
>> On 11/4/24 2:22 PM, glen wrote:
>>> Yeah, one explanation for manipulating the market in Trump's favor is to provide evidence for the coming election challenges/lawsuits. I've heard some talking heads suggest that much of the polling is done just to argue for a red wave. And those are purposefully biased toward Trump to help with the challenges.
>>>
>>> w.r.t. free markets: I agree. I don't think such a thing exists. But there is some freedom in there. It's a bit like information, I guess, where one might say that a random thing has more information than an ordered thing. The justification for markets, as I understand it, is to manage uncertainty. If you're completely ignorant of some referent process, an *open* market helps incorporate and reduce a bunch of [non]sense into something actionable. So (hearkening back to Nick's question) if you feel you must act prior to any rational result, a market is a way to facilitate that. But if you think you have low uncertainty, a preponderance of justified signals, the market for that should lose its freedom.
>>>
>>> But that argument implies that I would have to answer "yes" to my 1st question. The market would "have" more information than the polls. And even though I'm using my own argument, here, I'm not sure I believe that conclusion ... it feels more like the markets have different information than the polls. I'm just too ignorant to have an idea of what that information is for each.
>>>
>>> Anyway, yeah, I hold some Ada for the same reason you do ... just to keep me aware. It's the same reason I hold tiny bits of stock in Evil organizations like Wells Fargo et al, not for the investment, just to keep up. As fun as it is, reading https://www.citationneeded.news/ isn't adequate. But with the Kalshi, I've made the prediction Harris will win exactly twice, now, once to some Canadian lesbians we met at a pub in Glasgow and once to a lefty friend who is *really* distraught. I wanted to be sure I couldn't post hoc edit my memory later. What better way than to bet actual money?
>>>
>>>
>>> On 11/4/24 12:45, steve smith wrote:
>>>> 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?
>>>>>
>>>
>
> -- 
> ꙮ Mɥǝu ǝlǝdɥɐuʇs ɟᴉƃɥʇ' ʇɥǝ ƃɹɐss snɟɟǝɹs˙ ꙮ
>
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