I am working on seeing how comprehensively I can cover and discuss the war, but that takes time and the speed premium is super high. I decided to start here, and write quickly. Apologies in advance for any mistakes, oversights, dumbness, and so on. While I strive to provide sufficient Covid-19 news that you need not check other sources (and I will continue to do that), I will not be making any such claims regarding Ukraine even if I make regular posts. Please do not rely on me for such news.
Hi Zvi - Austin from Manifold here. Thanks for linking to us, even if you think we're "a mess"! Do you mind expanding on that (we're always interested in feedback!) My guesses are that you're talking about the fact that we're play money atm, or perhaps our dynamic parimutuel market making mechanism.
Also: I'd be interested in setting up Manifold markets for all 41 of these questions, especially if at some later date you plan on posting your judgement of the resolution (as you and Scott already do for yearly calibrations and Covid posts).
Finally: "multiple binary markets with different date thresholds" is one simple way to make these work as full-fledged markets, but it feels like it might be a lot of overhead for a trader to bet on... Plus it'd spread the liquidity even thinner; just 3 different dates (eg 1mo, 3mo, 6mo) would lead to 120 markets.
One improvement might be to use multi-category exclusive buckets (e.g. 0-1mo, 1-3mo, 3-6mo, 6+mo) on a single market for each question. I'm wondering if anyone has an incentive-compatible market design that lets people simply post their true prediction about a date and get paid out according to how correct they were?
Some of these markets are on Futuur….but then Futuur is a hot mess right now for real money markets. They use an AMM, with liquidity of around 100$ per market, so you can IMHO never make more than 100$ on any bet. This means that it’s nearly impossible to make any significant profit (if you value your time) and all you can do is pick up some 10-ish bucks per market (even for very misprized ones). As a result, markets are ridiculously misprized all the time and the forecasts it provides are very useless.
But then, Polymarket also shows that this isn’t an easy business to run profitably: Polymarket is AFAIK generating exactly 0 revenue, despite spending probably a lot on development (made worse by everything being implemented on a blockchain), paying the gas for all the trades (it’s on polygon, so not super expensive per transaction….still gonna add up) and now also subsidizing liquidity and trading (since the AMM makes providing liquidity risky but unrewarding, subsidizing it is probably a good idea….but also costs money).
Add to that the fact that trading is a zero-sum game……not sure how to best do this sustainably. Should we just see prediction markets as (subsidize-worthy) public goods?
I don't see how you can have a useful market on global nuclear war or something with a sufficiently high probability of leading to it. The correct choice is always to bet that it won't happen: if it doesn't, you collect your money, and if it does, your counterparties have been vaporized and can't pay.
Hi Zvi - Austin from Manifold here. Thanks for linking to us, even if you think we're "a mess"! Do you mind expanding on that (we're always interested in feedback!) My guesses are that you're talking about the fact that we're play money atm, or perhaps our dynamic parimutuel market making mechanism.
Also: I'd be interested in setting up Manifold markets for all 41 of these questions, especially if at some later date you plan on posting your judgement of the resolution (as you and Scott already do for yearly calibrations and Covid posts).
Finally: "multiple binary markets with different date thresholds" is one simple way to make these work as full-fledged markets, but it feels like it might be a lot of overhead for a trader to bet on... Plus it'd spread the liquidity even thinner; just 3 different dates (eg 1mo, 3mo, 6mo) would lead to 120 markets.
One improvement might be to use multi-category exclusive buckets (e.g. 0-1mo, 1-3mo, 3-6mo, 6+mo) on a single market for each question. I'm wondering if anyone has an incentive-compatible market design that lets people simply post their true prediction about a date and get paid out according to how correct they were?
Some of these markets are on Futuur….but then Futuur is a hot mess right now for real money markets. They use an AMM, with liquidity of around 100$ per market, so you can IMHO never make more than 100$ on any bet. This means that it’s nearly impossible to make any significant profit (if you value your time) and all you can do is pick up some 10-ish bucks per market (even for very misprized ones). As a result, markets are ridiculously misprized all the time and the forecasts it provides are very useless.
But then, Polymarket also shows that this isn’t an easy business to run profitably: Polymarket is AFAIK generating exactly 0 revenue, despite spending probably a lot on development (made worse by everything being implemented on a blockchain), paying the gas for all the trades (it’s on polygon, so not super expensive per transaction….still gonna add up) and now also subsidizing liquidity and trading (since the AMM makes providing liquidity risky but unrewarding, subsidizing it is probably a good idea….but also costs money).
Add to that the fact that trading is a zero-sum game……not sure how to best do this sustainably. Should we just see prediction markets as (subsidize-worthy) public goods?
I don't see how you can have a useful market on global nuclear war or something with a sufficiently high probability of leading to it. The correct choice is always to bet that it won't happen: if it doesn't, you collect your money, and if it does, your counterparties have been vaporized and can't pay.