[epolanski]

Also, I really feel like so many of the people defending prediction markets don't understand the very basics of economy and behavioral science: incentives.

You're creating a legalized system with the incentives to influence events to make terrible stuff happen.

We've already seen huge bets on the deadline of US attack to Venezuela spike few hours/days before the actual aggression.

Which means that insiders not only hold information, but have the incentives to make stuff happen.

And naysayers (which seem to be dropping from the same basket of NFT/crypto cultists) will tell you that this is about probability and information discovery.

[bit-anarchist]

And the naysayers would be right. They come from two approaches:

- Property rights: bettors are waging using their own property at their own direct risk. To prohitbit such a thing is to violate their property rights, plain and simple; - Information aggregation: prediction markets originally appeared to help make informed decisions about an event by proof-of-stake. If I'm not mistaken, this idea was originally developed by NSA/CIA/FBI for this purpose.

You mentioned misincentives like hold information (which isn't actually related to prediction markets, but more so to NDAs and similar) and "making stuff happen". The latter is functionally the same as policemen/judges/prosecutors/prisons having an incentive to create more criminals. Really, most goals people have may be achieved via criminal means. We don't outlaw free will because people have an incentive to achieve their goals via criminal means, we increase punishments (increasing potential loses), improve tracking/prevention (reducing success chances), etc.

[singleshot_]

Gambling -> bad gamblers lose -> bankruptcy -> creditors eat losses

Technically, a lot of gamblers are gambling someone else’s money, they just havens lost enough yet for it to matter.

If you want to bring back debtors prison I guess I’d be fine with legalized gambling. If I’m stuck holding the coupon, I’ll pass.

[bit-anarchist]

I feel like we are skipping a lot implicit things that shouldn't be left implicit. How are you paying for the bad gamblers' losses? Are you deliberately lending to gamblers without due check? Probably not, that would be very imprudent.

If you aren't the creditor, then I suggest that you make it explicit how you are losing wealth with this. Good chance the issue might be somewhere along the way.

[Terr_]

> bettors are waging using their own property [...] To prohitbit such a thing is to violate their property rights

This is technically true but doesn't deserve top-billing. Any fraudster or embezzler (or mugger or drunk-driver) will incidentally be risking some of their own property while exercising their right to control it.

> informed decisions about an event by proof-of-stake

A large chunk of the problem here occurs when people (politicians, judges, police, CEOs, etc.) are wagering assets and outcomes that aren't actually theirs, but things they control in (violated) trust. In other words, the personal "stake" of their overt bet is actually far too small.

> The latter is functionally the same as policemen/judges/prosecutors/prisons having an incentive to create more criminals. [...] we increase punishments

So... repercussions like "is is a crime for those people to possess a private account on the anonymous bribery website"?

[bit-anarchist]

In regards to first point, I might not have made it clear, but betting, on its own, does not harm others, contrary to mugging or hitting a car. Property rights come with the associated duty of respecting others' properties afterall. Failure to do will result in the duty to repair and pay to restore the "correct" state to best of their abilities.

Onto the second, I don't think the people you mentioned actually wager stuff that they don't own. To be more precise, the problem is that they use criminal means to "rig" the bet in their favor. That, at least, seems to be what OP is talking about with incentives.

Finally, regarding the last, I agree that roles that require trust should have more norms and rules to enforce that trust. In case of strictly private roles, I personally believe they should be done via contracts and cultural pressures. For governmental roles, they should be enforce by laws (such as the one you suggested). Since this is a top-level, abstract, description, we can get into more about more specific cases (such as CEOs).

[epolanski]

No, they would be wrong.

Have them have a prediction market on whether their house will be arsoned tomorrow or they will be hit by a car and instantly they will recognize the danger of the incentives and the bs of "information hedging based on price discovery".

Cause way worse events allow betting and profiting.

Give me a break, we're at the complete decadence of society and its intellect. Nobody can recognize right or wrong anymore let alone understand why insider trading, betting, etc, has been outlawed and prosecuted forever.

We live in the vilest era I remember since I was born, this is beyond disgusting.

[bit-anarchist]

I suggest that you think rationally about what you just said. Why wound anyone open a bet on "rando's house will be set on fire"? Why would they bet on "yes"? You can't present a generic case such as that without going into details about motivations and actual incentives.

Those way worse events also have a lot of extra political motivations behind it. If someone starts a war with the sole intention of winning a bet, there might worser problems than prediction markets.

The third paragraph might as well have been written by a consertive nutcase. Surely, if only you can recognize rights and wrongs, then you can objectively and undeniably prove them to this forum. On its own, it isn't much more than a appeal to tradition.

[Terr_]

> I suggest that you think rationally about what you just said. Why wound anyone

That doesn't read like a good-faith response. Parent-poster brought up an archetypal scenario asserting that certain people are ignoring malice/harms because they are not personally affected, exhibiting a latent logical contradiction or double-standard.

Instead of addressing the actual point (the existence/seriousness of the harm category) you've begun nitpicking that there aren't enough irrelevant operational details about the hypothetical arsonist and hypothetical attack.

_______

"They are correct that rain is natural and normal, this isn't a big deal."

"If it was your house being flooded by neighbors' failure to control runoff flooding created by impermeable construction, you wouldn't say that, you would recognize the harm!"

"Pish tosh! I suggest you think rationally about the fact that my house is on a hill! For what possible reason would I put myself in such a situation?"

[bit-anarchist]

The existence and severity of the harm, as argued by OP, relies on incentives. But incentives don't exist on a vacuum, nor are they individually absolute over human behavior. Simply stating that something has a bad incentive and that'll result in evil, on its own, isn't much better than assuming spherical cows.

The reason I nitpicked on the arsonist example is to elaborate on that: the arsonist does indeed have an incentive to put fire onto someone's house due to the bet, but the bet itself increases the probability of the fire being prevented, the culprit being caught, etc., which are all disincentives that may negate the original misaligned incentive. When we escape from this particular scenario onto others, this pattern remains. If the disincentives didn't prevent said harm, there are only two causes:

- culprit is unreasonable beyond saving: this one is trivial - they are beyond saving. Banning gambling would simply cause them to commit crimes in a different way;

- the mechanisms behind the disincentives are malfunctioning or aren't enough: that warrants an investigation onto said mechanisms, not a ban on prediction markets.

Perhaps this has made it clearer that, at least from my perspective, these "irrelevant details" aren't irrelevant.

[singleshot_]

> Why wound anyone open a bet on "rando's house will be set on fire"? Why would they bet on "yes"?

Bettor is an impoverished arsonist with no morals and confidence in his anonymity.

Better question: why would a person ask a question with such a breathtakingly obvious answer?

[bit-anarchist]

So, you are telling me this "impoverished arsonist" opened a bet on "will this rando's house be burned?", wagered on "yes" (with what money?), other people (who?) bet on "no" and no one found it suspicious? I hope you do realize that making it a public bet exposes information, and the very subject of the bet can be used to prove intentions.

Nevermind the fact about what would happen after the crime, should it even happen. It seems this hypothetical arsonist isn't just immoral, but also incredibly stupid (and that also begs more questions, like how do they have access to prediction markets like this).

For something so "breathtakingly obvious", it seems poorly thought through.

[singleshot_]

Okay, now I understand why you’re asking questions like this.

[epolanski]

Ay, didn't see your nickname, and your other posts.

Thanks for confirming what I said.

> And naysayers (which seem to be dropping from the same basket of NFT/crypto cultists) will tell you that this is about probability and information discovery.

Also, I ain't conservative, prediction markets, in their actual scope provide no benefits and plenty of wrong incentives.

The rest of your post makes no sense.

Plenty of world events have been impacted by people with misaligned interests, including by spies and double agents. Hell, wars in recent years have been started as distractions from internal political affairs.

And you want to argue to me that there's no people in position of power that may want to influence events they can bet on?

There's a reason why we prevent people in sport from betting: it's a matter of incentives. Give people incentives they will bend everything.

The fact that you can bet on a country attacking another is a tragedy.

[bit-anarchist]

So all you have is name calling?

Regardless, from HN's guidelines:

> Please don't post shallow dismissals

Edit: since posting this, the comment has been edited (at least the version I saw, which ended before the quote). I will write a full response later. For what's worth, I'm grateful for the longer post.

[bit-anarchist]

> Also, I ain't conservative, [...]

Then don't argue like one. Rather than making a shallow statement about "how people forgot about the evils of something" and leaving at that, get into more detail about the history. Mention specific events.

> The rest of your post makes no sense.

Can you specify what doesn't? I'd gladly do my best to clarify.

> And you want to argue to me that there's no people in position of power that may want to influence events they can bet on?

No, I'm asking why are there such people? How did they get into such positions? What can be reasonably done to prevent such people from rising into them? From what I've gathered, your point is that the mere existence of prediction markets create enough incentives for well-behaved people to misbehave. My position is that they were never well-behaved.

> There's a reason why we prevent people in sports from betting: it's a matter of incentives.

Sure, we can leave it at that. If we ignore everything else. The problem with sports betting is that it tends to convert the practice from a compention of ability into another form of gambling. This does more than create incentives, it creates a negative feedback loop that undermines the point of the practice. Neither prediction markets nor gambling are about preserving the sanctity of fair play, though. Also, for what's worth, betting about outcomes in sports seems to be legal in the US, just that athletes and other involved are prohibited from betting in their games. If your proposal is to ban people in power from being able to bet and implementing systems to prevent them from doing so, then I suppose we are in agreement. But do note that this is less about incentives, and more about trust (you can trust more that agents won't abuse their role and, if they do, it'll be harder to get away with it).

This segways into main issue with your post. Incentives are highly subjective. For all intents and purposes, they always exist. They are the product of people having goals and desires. The incentive to murder always exists. The reason people generally don't "bend everything" for it is that few will satisfy their goals with that, and even less have it as their goal. For the few that do, there's another tool: disincentives. I don't think I need to explain why murdering someone might result in a terrible outcome for most. For the even fewer that murder as their sole and primary goal, they will bend everything to accomplish it, regardless of incentives/disincentives. Personally, I don't find it even worth discussing. This, perhaps, made it clearer why simply saying "there are incentives to do evil" doesn't cut it. A deeper, more contextual analysis is needed.

Unless you can show there are only criminal uses, or even that there are no set of disincentives we can employ to dissuade potentially bad actors from doing evil, a blanket ban is not warranted, specially when it comes at the cost of a human right.