In the year before the 2020 election, a market opened on predictit called "Will Hillary run for president? Yes/No"
First this was a reasonable market, but quickly it became obvious she wasn't running (because she repeatedly said she wasn't, there was no campaign created at all, absolutely zero indicators she was running because she wasn't). Predictit allowed a comment section where people worked themselves into a frenzy every time some hillary "news" dropped that somehow secretly indicated she was running a phantom campaign. She missed primary registration deadlines - that only made the "Yes" market move up. There were still people hammering Yes up until a few weeks before the actual election and they closed the market.
Anyway it was the same thing. Low % "Yes" and 95+% "No." However, I found an edge holding on to a "baseline" Yes I'd established (1-2%, I can't remember) and just sell the waves of "news" that would spike it to 5+%. Then buy again at the baseline. There were a lot of shenanigans in the comments and people attempting to move the market with various tactics - it was a wild ride and one of my favorite markets I'd ever studied/participated in.
There are probably some true believers in the "Yes" jesus purchasers here but I imagine a lot of what I'm describing here too.
This is a reminder of how prediction markets don't always accurately estimate probability of events happening.
The most interesting part of the article IMO was the fact that the 3% probability is artificially high because there is no one willing to take the otherside of the bet, because betting "No" requires you to give your money to the prediction market for 6+ months, and if you're only getting a 1% return if you win the bet, you'll make more money if you put the cash in a high yield savings account.
Seems like prediction/betting markets only really work well when there is a reasonable chance of either outcome occurring, and is less accurate the more obvious one outcome is compared to another?
> This is a reminder of how prediction markets don't always accurately estimate probability of events happening.
I'm well aware that people believe that these markets are accurate estimators of probability of events, but I've (as a life long gambler) always viewed it as a measure of people's confidence in an event happening at a particular probability. People are wrong/delusional at scale all the time (think of the mandela effect), it can be the case that large groups of them converge on the right outcome via market forces, but it kind of makes the big assumption every participant is in good faith, rational, and informed.
I came here to say this, but you explained it better than I could have. At 3% odds, it's not worth it to participate in this market because a money market fund gives a better return, even if you believe the odds of this happening are 0 (and they're never 0, there was a first coming of Jesus after all, you don't have to believe in the supernatural to see how it could happen.)
It’s possible I’m being a jerk, but actually maybe betting services could do a social good: allowing people who believe things despite all reason to incur some small cost to themselves and hopefully course-correct?
We can even both-sides this; Hillary fans and people who believe Jesus will come back soon are usually on opposing sides, right?
Prediction markets were initially proposed to provide a social good, the idea being that the ratio of the current price of a share in a prediction market to the value of that share if the market resolves to "yes" is how likely the market thinks the market is to resolve "yes" as a probability. The social good is that you could use this to predict the future.
The people who were “Yes” hillary stans were very much not hillary fans. very much the opposite. much of it seemed fueled by far right wing conspiracy theories
Sounds similar in theme with what happened to Hertz. I think at some point it was bankrupt but speculation still had the share price way above what it was worth (nothing).
The original shares ended up being worth $8. There might have been a point during the bankruptcy were they were worth nothing (due to changing used car values) but in the end they were worth something.
there's a really interesting book called "When Prophecy Fails" that documents a doomesday cult. the cult had predicted a huge flood sometime in the 1950s and some sociologists infiltrated the group posing as believers to document their psychological response to the calamity not occuring
one of the core theses of the book is that adherents to a prophecy paradoxically believe in it much more strongly AFTER it's been disproven
This is exactly what the article is arguing people are doing when betting on the Jesus thing:
> [Time Value of Money] The Yes people are betting that, later this year, their counterparties (the No betters) will want cash (to bet on other markets), and so will sell out of their No positions at a higher price.
...
> Has this galaxy-brained trade ever gone well? Yes! In late October of last year — a week before the election — Kamala Harris was trading around 0.3% in safe red states like Kentucky, while Donald Trump was trading around 0.3% in safe blue states like Massachusetts. On election day, these prices skyrocketed to about 1.5%, because “No” bettors desperately needed cash to place other bets on the election. Traders who bought “Yes” for 0.3% in late October and sold at 1.5% on election day made a 5x profit!
No, not really. What I was doing was playing predictable spikes in volatility in the market over a long span - theoretically i could have done it forever had the market never closed. I also doubt the hillary market moved because of liquidation needs in other markets - it was driven almost entirely by conspiracy theory news. I followed it very closely, it was not this at all.
So, there are actual geopolitical ramifications of this metric.
A lot of US protestant theology is rooted in a concept called "dispensationalism" that was introduced in the mid 1800s. It's a heady concept to explain, but essentially it comes down to a few linked core concepts:
- The secret, sudden arrival of Jesus to "rapture" believers away
- The world is getting worse, not better. There is limited use in improving society.
- Strict literalist interpretation of all scripture (where convenient, obv)
- An individual's ability to discern scripture as well as the state of the world
- The world is getting worse, not better. There is limited use in improving society.
That sounds like 19th century fire and brimstone revivalism. Most Christians are not that nihilistic. The sects that survive and flourish tend to be those that don't impose a fatalistic view of the world.
I agree with the sentiment, but in this specific case, the "nihilism" is more of a green card to do whatever to better your own life, as there is no point improving anyone else's, just focus on yourself and survive.
So here it could be seen as an excuse to not only exploit existing systems, but also to avoid attempts at fixing them.
So in a way, holders of such fatalistic believes are ironically flourishing
Interesting but US isn't the only country that does this. There's an entire religion that was imported out of virtue signaling politics that rose out of the economic comforts afforded by this "protestant theology" that defeated a major superpower.
Fast forward to today, that foreign religion has multiplied (largely due to religious customs) while the local population has dwindled and lost much of its power owing to a political ideology overriding theology.
I see this foreign religion not being compatible with the host country's religion or value system and that many are rallying behind a sort of pan-Western theology to counter the many social issues throughout.
The discussion in Polymarket revolves around the trustworthiness of the market creator and their resolution criteria. Any discussion here that doesn't consider those things is missing the forest for the trees. The market isn't really about Jesus. Jesus is just the engagement hook. It's the reason this post has 147+ comments on Hacker News and $500k+ in market transactions on Polymarket. There's very little stopping the market creator from citing a guineapig pet lovers blog as his source with a claim that Jesus has returned as an adorable little guy with too much rizz to be anything other than the second coming.
Fair resolution is the single biggest issue with prediction markets. I don't see how a market resolution based on the occurrence of a supernatural event isn't a problem.
Especially good callout in the context of Jesus returning. It would look very different today, but there was one who was pretty damn close to pulling it off - would be curious when poly market calls the bet. Chatgpt summary -
* Sabbatai Zevi (17th century): One of the most famous false Jewish Messiahs. He gained a massive following across the Jewish world. However, when faced with the Ottoman Sultan's choice between conversion to Islam or death, he converted. This conversion was a devastating blow to his followers and essentially a public "recantation" of his messianic claim, though not necessarily an admission of it being a lie on his part as much as a desperate act to save his life. Many of his followers were deeply disillusioned, while others continued to believe in him even after his conversion, developing complex theological explanations for his actions.
The settlement criteria for most of these is pretty strict and clearly laid out in the terms.
> The resolution source for this market will be a consensus of credible sources.
That is pretty sparse, but I suspect Polymarket has a vested interest in making sure this resolves appropriately (as noted in the article). I do like the use of the guineapig with rizz anyway.
If Jesus returned, people wouldn't believe it unanimously; it would be a scissor like everything else. (I don't even want to give examples.)
Conversely, if Jesus has not returned, some people can be convinced that he has.
Which brings me to the criteria. What are acceptable criteria? Maybe, "will a plurality of people believe that Jesus has returned in 2025?"
Eschatological cults routinely convince small numbers of followers that the end is coming. Hustlers do this all the time. I've been told personally, directly, that we know the date. It's coming. (The date in question came and went.)
Given the above, could 2025 be the year of Deep Fake Jesus?
Polymarket itself has a very strong incentive to offer interesting long odd bets, in the hopes that anyone bites.
They get the time value of your money.
And it makes the site more interesting. It's free PR.
It would be very surprising if they don't know this and are not taking advantage of the dynamic. It isn't even sketchy, nobody loses any value they didn't choose to lose.
The way they will arrive at the answer is very vague... "The resolution source for this market will be a consensus of credible sources."
I'd like to know the list of said sources and what consensus means (51%?). Presumably, this question can be asked and answered every minute? hour? so we could have up to the minute coverage of the second coming.
It's worth nothing that it takes less money than you may expect to significantly shift a prediction market's trading price. This article, while its tone aged poorly with the relevant election results, covers the math behind this quite well.
> This article, while its tone aged poorly with the relevant election results,
While I get your point, it’s critical to recognise that betting 90% on a six being rolled doesn’t make you correct when a six is rolled. You can believe polymarket was truly mispriced even with this outcome
The somewhat moribund Foresight Exchange which is a ~30 year old play money idea futures market has discussed this idea a lot over the years, even to the point of having a number of "True" claims of exactly the form described in the article, such as http://www.ideosphere.com/fx-bin/Claim?claim=T2015
Readit News
In the year before the 2020 election, a market opened on predictit called "Will Hillary run for president? Yes/No"
First this was a reasonable market, but quickly it became obvious she wasn't running (because she repeatedly said she wasn't, there was no campaign created at all, absolutely zero indicators she was running because she wasn't). Predictit allowed a comment section where people worked themselves into a frenzy every time some hillary "news" dropped that somehow secretly indicated she was running a phantom campaign. She missed primary registration deadlines - that only made the "Yes" market move up. There were still people hammering Yes up until a few weeks before the actual election and they closed the market.
Anyway it was the same thing. Low % "Yes" and 95+% "No." However, I found an edge holding on to a "baseline" Yes I'd established (1-2%, I can't remember) and just sell the waves of "news" that would spike it to 5+%. Then buy again at the baseline. There were a lot of shenanigans in the comments and people attempting to move the market with various tactics - it was a wild ride and one of my favorite markets I'd ever studied/participated in.
There are probably some true believers in the "Yes" jesus purchasers here but I imagine a lot of what I'm describing here too.
The most interesting part of the article IMO was the fact that the 3% probability is artificially high because there is no one willing to take the otherside of the bet, because betting "No" requires you to give your money to the prediction market for 6+ months, and if you're only getting a 1% return if you win the bet, you'll make more money if you put the cash in a high yield savings account.
Seems like prediction/betting markets only really work well when there is a reasonable chance of either outcome occurring, and is less accurate the more obvious one outcome is compared to another?
I'm well aware that people believe that these markets are accurate estimators of probability of events, but I've (as a life long gambler) always viewed it as a measure of people's confidence in an event happening at a particular probability. People are wrong/delusional at scale all the time (think of the mandela effect), it can be the case that large groups of them converge on the right outcome via market forces, but it kind of makes the big assumption every participant is in good faith, rational, and informed.
We can even both-sides this; Hillary fans and people who believe Jesus will come back soon are usually on opposing sides, right?
https://nypost.com/2021/05/12/hertz-investors-snag-8-a-share...
one of the core theses of the book is that adherents to a prophecy paradoxically believe in it much more strongly AFTER it's been disproven
> [Time Value of Money] The Yes people are betting that, later this year, their counterparties (the No betters) will want cash (to bet on other markets), and so will sell out of their No positions at a higher price.
...
> Has this galaxy-brained trade ever gone well? Yes! In late October of last year — a week before the election — Kamala Harris was trading around 0.3% in safe red states like Kentucky, while Donald Trump was trading around 0.3% in safe blue states like Massachusetts. On election day, these prices skyrocketed to about 1.5%, because “No” bettors desperately needed cash to place other bets on the election. Traders who bought “Yes” for 0.3% in late October and sold at 1.5% on election day made a 5x profit!
A lot of US protestant theology is rooted in a concept called "dispensationalism" that was introduced in the mid 1800s. It's a heady concept to explain, but essentially it comes down to a few linked core concepts:
- The secret, sudden arrival of Jesus to "rapture" believers away
- The world is getting worse, not better. There is limited use in improving society.
- Strict literalist interpretation of all scripture (where convenient, obv)
- An individual's ability to discern scripture as well as the state of the world
- Obsession with Israel as a nation-state
https://christianhistoryinstitute.org/magazine/article/dispe...
By tracking this number, you have a good proxy for the current fervor of a lot of intertwined political concepts in the US.
That sounds like 19th century fire and brimstone revivalism. Most Christians are not that nihilistic. The sects that survive and flourish tend to be those that don't impose a fatalistic view of the world.
So here it could be seen as an excuse to not only exploit existing systems, but also to avoid attempts at fixing them.
So in a way, holders of such fatalistic believes are ironically flourishing
Fast forward to today, that foreign religion has multiplied (largely due to religious customs) while the local population has dwindled and lost much of its power owing to a political ideology overriding theology.
I see this foreign religion not being compatible with the host country's religion or value system and that many are rallying behind a sort of pan-Western theology to counter the many social issues throughout.
* Sabbatai Zevi (17th century): One of the most famous false Jewish Messiahs. He gained a massive following across the Jewish world. However, when faced with the Ottoman Sultan's choice between conversion to Islam or death, he converted. This conversion was a devastating blow to his followers and essentially a public "recantation" of his messianic claim, though not necessarily an admission of it being a lie on his part as much as a desperate act to save his life. Many of his followers were deeply disillusioned, while others continued to believe in him even after his conversion, developing complex theological explanations for his actions.
> The resolution source for this market will be a consensus of credible sources.
That is pretty sparse, but I suspect Polymarket has a vested interest in making sure this resolves appropriately (as noted in the article). I do like the use of the guineapig with rizz anyway.
Deleted Comment
Conversely, if Jesus has not returned, some people can be convinced that he has.
Which brings me to the criteria. What are acceptable criteria? Maybe, "will a plurality of people believe that Jesus has returned in 2025?"
Eschatological cults routinely convince small numbers of followers that the end is coming. Hustlers do this all the time. I've been told personally, directly, that we know the date. It's coming. (The date in question came and went.)
Given the above, could 2025 be the year of Deep Fake Jesus?
Deep Fake Rapture?
It does make one think, at least.
"Take heed that no one deceives you. For many will come in My name, saying, ‘I am the Christ,’ and will deceive many."
They get the time value of your money.
And it makes the site more interesting. It's free PR.
It would be very surprising if they don't know this and are not taking advantage of the dynamic. It isn't even sketchy, nobody loses any value they didn't choose to lose.
I'd like to know the list of said sources and what consensus means (51%?). Presumably, this question can be asked and answered every minute? hour? so we could have up to the minute coverage of the second coming.
https://quantian.substack.com/p/market-prices-are-not-probab...
While I get your point, it’s critical to recognise that betting 90% on a six being rolled doesn’t make you correct when a six is rolled. You can believe polymarket was truly mispriced even with this outcome