Yes, but it just affects how liquidity is allocated, and it doesn’t just affect how the AMM updates, it affects how users trade as well since they respond to that, either way they’d want to bet to their true probability. So changing the pricing curve is largely a matter of market dynamics and incentives, rather than actually affecting the probabilistic structure.
ToasterLightning
Karma: 151
What I mean is that the if the AMM estimates the probability at .75, it should charge .75 for a marginal YES share, by law of expected utility. I don’t think a different probability function should alter the probabulity theory, just change the pricing curve.
If you could link me to these similar derivations I’d be interested to read them, I mostly wrote and worked through this because I couldn’t find any existing ones from first principles and was sure it would be possible.
price = probability is a general rule for prediction markets, it’s more that CPMMs can be derived from the probability function we described (no/(no+yes)).
The generalization I’m using in my current implementation is https://manifoldmarkets.notion.site/Multi-CPMM-62fe5b99013c4d5a87dfa84e0b8fa642, although I believe Manifold currently uses some bizarre auto arbitrage system between linked binary predictions for exclusive categories. Similarly, you can also extend CPMM by adding a parameter to allow market initialization at different probabilities, and also to allow users to inject liquidity without pushing probability towards 50%.
Regarding other probability functions, there are of course a whole family of constant function market makers that CPMM is a member of. As a trivial example, (no2/(no2+yes^2)) should also match our desiderata, I believe.
Additionally, starting from the angle of “We have a market maker with pools of shares, how do they calculate probability from these pools” is just one approach you can take.
There’s also the LMSR (Logarithmic Market Scoring Rule) also developed by Robin Hanson, which approaches it from an entirely different angle, starting from asking how you can score predictors based on how well they performed, and then applying this to rewards and incentive alignment in a prediction market. This is actually more reflective of the Bayesian structure of the market than CPMM is, I was largely joking when I made that claim.
There’s also DPM (Dynamic Parimutuel), which adapts existing parimutuel betting systems to prediction markets. It does have the disadvantage of not being able to know ahead of time how much money you’ll receive from your bet, only how much money you’ll receive in expectation from your bet, but it has some advantages of its own.
I have this paper saved to read through and think about, I don’t really understand it yet but it also proposes a unique solution to this problem.
Largely, CPMM is the one I understand most intuitively out of all of these, which is part of why I’m using it in my personal prediction market implementation.
Thanks for the questions!
Edit: After encountering some problems I have since done more research. Multi-CPMM is dumb and bad and Multi-Binary (manifold’s current implementation) is superior in every regard actually. I am signing the manifold markets apology form (reason for behavior: thought the decision was for architectural reasons, was repelled by the auto arbitrage nature). I will hereby respect Manifold Markets and I will NOT talk down on the greatest prediction markets platform of all time.
Designing Prediction Markets
I was inspired by this post and hope an image version of it will be appreciated:
Well, I don’t think bear fat with honey and salt specifically would do well, due largely to supply problems. Lard is fairly neutral, but you might get good results with tallow, schmaltz, or duck fat. Another factor is that I’d expect it’d be something that’d get unpalatable if you ate a lot of it, because it’s so fatty and the flavors are so strong, but if you only ate a little with crackers it tastes really good.
Did you ever end up doing this? I think this is a good idea.
I find it rather strange to list “Audere Snyder” as his name on the wiki—”Audere” is an online username rather than something he was changing his name to, he still went by Max/Maximilian to his close friends (Source: i am his ex). It’d be kind of like listing my name as “ToasterLightning Nightingale”, either “Audere” or “Maximilian Snyder” would work instead.
....I know someone named Chase Novinha? I don’t think it’s the same person, though.
Edit: Confirmed same person, slimepriestess has said they are “safe and accounted for,” and are one of the cofounders of its alignment company.
Oh, I don’t mean to derail it, I’m just saying that if I pull the lever and pull it back, I still pulled it, so Omega will make their choice based off of that.
Many of these are solveable via the strategy “pull the lever and then quickly pull it back”
Wow, I came here fully expecting this post to have been downvoted to oblivion, and then realized this was not reddit and the community would not collectively downvote your post as a joke
Yeah, that’s a good point. I certainly don’t claim that Michael is to blame for her actions.
the girl in question has publicly declared some of the psychological techniques she uses on people in order to induce altered states to be downstream of michael
Yeah I was initially going to dispute it and then I thought some more and realized it was probably correct.
...iirc you had LSD like a week or so before you had the cannabis? And you took the cannabis while fairly sleep deprived. And I definitely started getting worried about your mental state after the LSD, so even if you consider the psychotic break as starting a few days after taking cannabis I definitely think the psychedelics were a compounding factor.
Sapph is referring to @AprilSR (I’m involved in the situation, she’s also commented down below confirming it to be her)
....is the second person me? You can say it is if it’s me, I don’t think it’s an inaccurate description. Edit: thought about it a bit more and yeah it is probably me
I’m familiar with the events that Sapph refers to, and for the most part agree with the general description of them as well as the recommendations. If you don’t want to become psychotic, don’t do the things that are famously associated with becoming psychotic.
In my experience with US gas stoves, generally you turn the knob a little to ignite the burner, and then after you turn it more to release more gas. The ignitor is only active in a narrow region at the beginning of the knob.
What’s “TOC Buster”?