Will the winning strategy on "Why did the Democrats lose" be non-predictive?
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3
Ṁ115
Dec 1
37%
chance

The market linked below is predicting the outcome of a poll of why Manifold losers think the Democrats lost the 2024 election. The rules of that market are that it resolves YES to all options voted in the top 5, and NO on all other options. There are currently like 50 options and they add up to much more than 500%, which means there's a lot of free mana to be made by buying NO on all options. I've done quite a bit of this, and I think I've got over 1,000M in guaranteed profits.

I define this as a "non-predictive" strategy. I'm not trying to guess what people will vote for - I'm just exploiting the market structure and irrational collective behaviour of other market participants. Other bettors are employing predictive strategies: they're actually betting YES on the options they think will win.

Which strategy is better? Well, obviously my strategy is better because it's risk-free, but this market asks whether it will achieve an even higher bar. If the person who makes the most profit on the linked market followed a non-predictive strategy like mine, this market resolves YES. If they followed a predictive strategy, this market resolves NO.

Deciding whether they followed a predictive or non-predictive strategy will require a bit of judgement on my part, so if you take part in this market, you've got to trust me to resolve correctly, and I recommend you don't bet large amounts of money. This is all just for fun. I won't bet myself.

In general, if they bet YES on one or more of the winning options, I'll judge that to be a predictive strategy. If they bet NO on all of the winning options, but still made a profit because they also bet NO on everything else, that's non-predictive. The judgement will come in if they bet really trivial amounts of NO on the winning options compared to the losing options (such that they'd lose mana if different options won).

Any questions, please ask before you bet! This market will close when the other market closes (i.e. before the poll) so that it doesn't incentivise any mischief.

https://manifold.markets/bagelfan/why-did-the-democrats-lose-the-2024

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I think your strategy works partially because of the strange incentives from writing questions. I have three questions on the market, and the liquidity was low enough such that it was profitable for me to "boost" my questions up the ranking by buying yes shares. Notice that the higher % questions have more traders than lower % ones, typically. I get 10 mana per trader on my question, so I had some incentive to make sure my question was easy to notice. It's a small incentive, but if many question writers do this, then it gives you an arbitrage opportunity. Also, people are trading more for fun.

@TheUserU2 that's a really interesting point about boosting your questions for more traders! A completely different non-predictive strategy, but not one we'd notice by looking at profits.

bought Ṁ75 NO

Well, obviously my strategy is better because it's risk-free

I think the trading-correct way to think about it is that you should get payed for the risk you take, so if the two strategies have equal ev but one is more risky it’s worse, and it needs some amount more ev for the added risk to be worthwhile

but the strategy of bet 1 option up is much higher variance so probably 1 person will get it mostly right anf make a lot mroe profits im not sure tho

@Bayesian yeah I agree. I was mostly joking when I wrote that. I do think my approach is higher ev than trying to pick winners though because I think it's a hard thing to predict, and because there's so much risk free mana in this particular situation.

But yeah, in a sufficiently large market, the winner will probably be a high variance strategy, whether or not that strategy was high ev. I suspect my market will resolve NO. But like I said, there's so much risk free mana in this situation!

@Fion 1k Mana from Arb is crazy

@bagelfan My paper profits are almost 2k now. 😁

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