I still don't understand the Polymarket business model. Why take the legal risk of $3 billion in volume as an unlicensed commodities exchange if you're not even going to get paid for it? 1% would be $30,000,000!
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See Alex Tabarrok's triumphant take from before the raid: https://marginalrevolution.com/marginalrevolution/2024/11/pr...
Here's an interesting question. We know that if a bettor in a prediction market wants to manipulate the market's prediction, it's likely to be extremely costly for them (though Théo's big bet on Polymarket seems to have shifted it a lot, so maybe we should doubt this theory). Does the operator of a prediction market have less-costly ways to manipulate the prediction?
Other than just shutting down the market permanently on Election Day, Mt. Gox style, which is an extremely profitable scam whether you manipulated the predictions or not.
About a decade ago I was told by someone on GOOG's anti-spam team that they had thought they'd finally made it too costly to spam, only to discover that political spammers just didn't care how much it cost.
By your yardstick, humanity is learning the outcome of sports events ahead of them happening and this is a profound world wide tool for the advancement of humanity. For me it's gambling, for that other guy too. Switching "sports event" for "election" doesn't make it more profound. And people will still kill themselves when they are at the end of the gambling spiral.
Observably, so far, political spammers do not obtain ten trillion dollars per US election to spend on influencing it. Arguably this is only because they haven't found an effective way to spend that much money, and we should be very concerned that a mere 50 million dollars seems to have been enough to influence the prediction market results quite seriously in this case.
But that's not necessarily inherent to markets, even prediction markets. Foreign exchange rates were a major issue in our last election, because our rate of inflation was top in the world last year, but it isn't plausible for political parties to bet enough in forex futures markets to influence their predictions of those exchange rates—because banks bet almost 8 trillion dollars per day in the forex markets, so to intentionally maintain an irrational prediction in the market over the several months of the campaign, you'd need to be rich enough to expend roughly the entire world yearly GDP, and willing to lose it.
If sending spam required posting a bond set by the receiver, to be paid to the receiver if they decided the email was unwanted, I think you'd find that even political spammers did start to care a great deal about the cost. Until they cared, I'd set up domains with billions of potential receivers, each setting a ten-dollar bond. After the political spammers transferred their first few billion dollars to me, they'd run out of money.
1. I didn't make any claims about prediction markets†. I made claims about what prediction-market advocates like Shayne Coplan and Alex Tabarrok believe, because the question was what could motivate someone to operate an unprofitable one. Since I am not not currently operating a prediction market or working on a prediction-market project of any kind, it is wholly irrelevant which shit I do or don't believe about prediction markets.
Analogously, if I were to claim that the Nazis killed ten million people in death camps because they believed that Jews and Roma were subhuman, you could not validly argue that, in fact, Jews and Roma are not subhuman, and therefore the Holocaust could not have happened.
2. You do not present any arguments that the worthless comment by "FactKnower69" (!!) was itself worth posting, or even correct; you only present an argument about why you think prediction markets are not worthwhile.
Presenting any argument at all puts your comment head or shoulders above the comment I was criticizing. But "FactKnower69"'s claim was not that prediction markets were harmful; it was that advocates of prediction markets were both insincere and highly profitable, in particular the people operating PMs like Polymarket and Kalshi, and also that I am a fucking idiot. I concede that I am a fucking idiot; "FactKnower69" nailed that one entirely by chance. But, with respect to the rest of their comment, it is not only possible but actually common for people to sincerely advocate policies that are, unbeknownst to them, harmful, as well as to profit from those policies. So, even if prediction markets are not worthwhile, their advocates may be sincere and/or unprofitable.
Moreover, even if prediction-market advocates are insincere and/or profitable, "FactKnower69"'s comment contains no information tending to show that; it's just an unsupported assertion. Worthless unsupported assertions of both true and false claims are also common, so even if you were to show that prediction-market advocates were insincere and/or profitable (a task you did not attempt), that still doesn't rescue "FactKnower69"'s comment from the sewer it was born in.
3. Your argument is at least equally applicable to stock, commodities, and forex markets; "knowing" how much hard red winter wheat or aluminum will cost a year from now, or how profitable PPG Industries will be over the next few years, is even less of a "profound world wide tool for the advancement of humanity" than "knowing" who will win the US election, and those markets are also well known to cause suicide. So your argument is not a very strong argument; it would entail that those markets are also net harmful and should be eliminated if possible, which I am sure you will concede is a position far out on the fringes of extremism.
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† Well, except that I did claim that it would be very profitable for an unethical prediction-market operator to disappear with everyone's money on the eve of a major event like an election, but that seems to be irrelevant to the rest of the discussion.
Come to think of it, that sounds a lot like diplomatic exchanges during the Bronze Age: sending your ambassador along with a bunch of gifts like exotic animals and spices and slaves was an implicit way of saying "I'm confident you'll want to hear my guy out; confident enough that if you don't think his proposal is worthwhile, just keep these gifts and don't reciprocate them".
for good measure, Mark Twain on lagniappe:
> The shopman always responds; gives the child a bit of licorice-root, gives the servant a cheap cigar or a spool of thread, gives the governor—I don't know what he gives the governor; support, likely.