[ExI] online betting on ideas futures

Sat Feb 8 15:29:19 UTC 2020

From: extropy-chat <extropy-chat-bounces at lists.extropy.org> On Behalf Of Will Steinberg via extropy-chat

>…It's good to be one step ahead of the collective realization.  Treat value you loan to someone else as good as lost…

It isn’t clear to me that I am a step ahead of the collective realization.

There was a critical political primary in Iowa Monday, although I do not recall the name of the party.  There were a large number of contestants but it came down to two fellers who came out ahead of the pack.  Problem: it was and still is unclear who won that.

It is a well-known phenomenon that people tend to pay too much for their own favorite candidate, so the front-runners’ YES bets add up to more than a dollar (which guarantees the company holding the money will make a big profit.)  Even when it was clear it was between two fellers, their YES bets added to more than a dollar, just those two.  But after a coupla days of delay and realization that this might be a judgment call… the front runners YES bets added up to less than a dollar.

This is the first time I have ever seen this: one can buy YES bets for both for 97 cents, guaranteeing a 3 percent profit either way it goes, assuming it goes one way or the other.

But… this apparently expresses about a 3% risk opinion that the company will never pay anyone, and just keep the money.

They added a bunch of rules explaining what happens if it was a tie (it was.)  The first tiebreaker is razor thin and unclear, which triggered a re-canvas, but some of the original information was apparently lost somehow.  So the company gets to choose who to pay, or continue to delay, perhaps indefinitely, and I can see why they might do it: the trading volume this week alone (after the event in question) has been over 6 million shares.  That’s 30k profit for the company on that one bet alone in one week, for an event already past.  However… that company is holding everyone’s money.

They might skip town.  But why bother skipping town?  No one knows what town that company is in now, so why skip to someone else’s?  They could just delay judgment and never go anywhere.

When Robin Hanson was doing Ideas Futures and we found all these cool fun paradoxes?  The company could do one, say adios in a fun way by offering a bet worded thus:

This online betting company will not pay this bet.

Then if they don’t pay, the company owes you a dollar for each share you bought but you don’t get any payoff.  If they do pay, they don’t owe you anything because you were wrong.

Then after everyone realizes we’ve been had, they offer another bet:

No one will even bother trying to sue this online betting company.

Adios amigos and thanks! ….heeeeeeeehehehehehehheeeeee…

The founder then spends his golden years sipping mai tais on the beach in Tahiti while bikini-clad waitresses fawn over him and take care of his every need.  Meanwhile we sit back here, a little older, a little poorer, a little wiser, a little uglier.

The few bucks I have in this game will not be sufficient to cause me to lose my sense of humor over the loss.

spike

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