> By the finale, Kalshi’s “Survivor” market had reached a volume of $32.7 million
I don't get this. How are people "betting" on something that is "known information" for other people? What's the point? I get betting on stuff that no one can know, but who's taking "the other side" on these bets? Why would you put money into something knowing that there are people who already have the absolute answer?
Yes but in this case, tens or hundreds of people know the outcome months in advance. I'm very surprised that the market doesn't immediately converge to 100% for one candidate. The winner is not really a forecastable 'random event' in that by the time the show is airing, it's not being pulled from a distribution.
In theory, an insider willing to take any positive-expectation bet would drive the market price arbitrary close to the correct answer, but in practice they might be under NDA and want to avoid getting caught, or they limit their bet amount for other reasons, so the market ends up dominated by gamblers placing uninformed bets.
In none of those cases did the market converge as a result of the insider betting, it was only discovered with hindsight that someone had placed a suspiciously well-timed large bet. So that's where "they limit their bet amount for other reasons" comes in. I guess it's difficult to get a large loan for "I know a secret that will allow me to double my money in a few days, honest!" so they have to make do with their savings instead.
NitpickLawyer · · focus · HN ↗
I don't get this. How are people "betting" on something that is "known information" for other people? What's the point? I get betting on stuff that no one can know, but who's taking "the other side" on these bets? Why would you put money into something knowing that there are people who already have the absolute answer?
echelon · · focus · HN ↗
Insiders have an edge and can in theory shape the overall distribution of bets such that the real world outcomes are priced in better.
sd9 · · focus · HN ↗
yorwba · · focus · HN ↗
FireBeyond · · focus · HN ↗
yorwba · · focus · HN ↗