If you update too little, and accept too many bets, you will lose a lot of money to people with better information than you. On the other hand, you can also go too far in the other direction. If your response to being offered a five-cent bet is to immediately update to accept their probabilities (and refuse the bet), you will be very easy to fool (although hard to exploit by betting).
This, incidentally, is a real bookie thing. They worry constantly about informed bettors making money off them, but they also want the ‘flow’ in order to update their odds. So there’s a constant cat-and-mouse between the betting syndicates who have informational edges of various sorts, and the bookmakers, who try to limit the bettors to small amounts while then turning around and updating their odds based on the revealed information (to the bettors’ perennial frustration, as the bookmakers can close accounts unilaterally or seize winnings).
This, incidentally, is a real bookie thing. They worry constantly about informed bettors making money off them, but they also want the ‘flow’ in order to update their odds. So there’s a constant cat-and-mouse between the betting syndicates who have informational edges of various sorts, and the bookmakers, who try to limit the bettors to small amounts while then turning around and updating their odds based on the revealed information (to the bettors’ perennial frustration, as the bookmakers can close accounts unilaterally or seize winnings).