Is it socially acceptable for a market creator to correct a market before resolving it?
14
7
Ṁ56
resolved Mar 23
Resolved
NO
In the situation where a market is about to close at a number different from its current probability, is it ok for the creator to correct it right before closing? (Where "ok" means "the community isn't going to be upset at that person or more reluctant to bid in their future markets".) Does it depend on whether the market is about a personal detail? For example, if the market gets "will Russia do X" wrong, is it more acceptable for the creator to correct that market than it would be for them to correct a market of "will I do 30 pushups this week"? (This is all assuming no dishonesty or other manipulation on the creator's part; the market legitimately got it wrong or didn't have enough information.) I'll resolve this market based on what seems to be the best answer according to the comments. Note that if 51 people say it's fine and 49 people say they'd object, that will result in the market resolving to NO, since having 49% of traders not want to bid in your future markets is still a significant cost to incur. If people agree on a mixed answer, such as the Russia example being fine and the pushup market example being not fine, I'll resolve to PROB 50%.
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bought Ṁ20 of NO
I wrote the following in the description of a question I created to deal with this issue: "I will not participate in this market myself (with the possible exception of M$ 1 "YES" trades to allow myself to comment with information for all participants), nor give favoritism to some traders by privately sharing inside information with them that might give them an advantage." https://manifold.markets/WilliamKiely/will-william-kiely-be-a-top-20-trad I don't think adding disclaimers like this should be necessary. Perhaps market creators should have the option to check a box when they create a market that allows them to remove their ability to participate in the market. Whether they are allowed to participate or not would be visible to all market participants. The norm would then be that if the market creator has allowed themself to participate, then it is fine for them to participate in all circumstances (even right before resolving the market, if the market is still open for trading), whereas if they are not allowed to participate then there's no issue.
bought Ṁ1 of NO
Maybe I would not consider it as OK, but market payout model should be constructed in way that it is not causing problems. This kind of problem should not require social pressure to be solvable.
bought Ṁ20 of NO
If doing that is profitable for the market maker then it has to be taking the M$ out of someone else's profits. This seems unfair to me and knowing the market creator planned to do that would make me significantly less inclined to participate in the market. If doing that is not profitable for the market maker, then I don't see a harm, but there's no point either so why allow it? Either way, a norm against it makes sense to me. With the exception of maybe a M$ 1 trade so they can post a comment, or some other reason for making a trade that isn't about making a profit.
bought Ṁ1 of NO
Markets should *reduce liquidity* in advance of predictable common knowledge. Closing sets liquidity to 0 and that's no good.
bought Ṁ1 of NO
Yet another reason that markets should close in advance of their expected resolution time!
bought Ṁ1 of YES
The norm was definitely "No" in DPM, because it cuts right out of other people's expected profits. I don't think it will be as big a problem with CFMM. It's less *interesting* to bet on markets that you know others have a strong insider advantage on, so a creator who is known to participate in their own markets a lot might get less engagement, but I think only doing a resolve-time correction solves that pretty neatly!
bought Ṁ1 of YES
Not all markets are created because the creator wants information. After all, the whole point of having a 4% fee go to the market creator is because it probably wouldn't be worth it for them to create markets if the only reward were the information. If Manifold grows significantly, I expect we'll end up seeing a relatively small number of people who have perfected the art of market-making, and whose markets constitute the majority of highly-traded ones. (Seems like Duncan and a few others are sort of already moving into this space.) Most of those markets won't have been created for the information, but rather in order to turn a profit off the trading.
bought Ṁ1 of YES
@IsaacKing I'm not sure how much of a problem it would be for the creator to get no effective fee if other traders moved the probability to 100% before the market closed as YES. The creator is being paid richly in information in that case. After all, the creator had enough uncertainty that it was worth creating the market. As for the incentive to pick an early close date, we could say that no one, including the creator, can trade after the close date. This creator bonus only would only apply if the creator resolves the market while trading is still open. Finally, having intentionally vague resolution criteria is basically just cheating and would be shooting yourself in the foot. The more important incentive is having traders feel good about participating in your markets.
bought Ṁ1 of NO
In general, liquidity represents an offer to buy information. Information has a habit of becoming suddenly cheap, and then the first to react gets rewarded. Perhaps we could detect whether a piece of information has become suddenly cheap by placing (large?) trades in a (not publicly visible?) queue for a creator-specified period such as an hour; and then if multiple people arrive wishing to sell the same information, you pay less M$ for it.
bought Ṁ20 of NO
No for DPM, silly for CFMM, No if they add the ability for other people to add liquidity.
bought Ṁ1 of YES
@Yev If a market is currently at 10% and I'm going to resolve it as YES, doesn't buying a bunch of YES shares first make me more of a profit than if I don't do that? If I don't buy any YES, all the winnings go to the other traders in the market who bought YES. By buying YES, I'm able to capture much of their profit. @dreev I like the idea of giving the discrepancy to the creator, but as you mention that leads to them getting nothing if the market already converged on 100% or 0% before close. It incentivizes creators to create markets that traders won't be able to get full information on by the end, such as by setting a close date that's far in advance of the resolution date. It also incentivizes vague resolution criteria that allow the creator to resolve it either way and provide a reasonable-sounding defense for either decision.
bought Ṁ20 of YES
When this came up in the Discord before the move from DPM to CFMM, one of the founders said it was frowned upon. That discussion also seems to have led to making the creator's trades be public, to expose/prevent such behavior. But my thinking is this: Markets currently pay a 4% fee to the creator, which isn't very clean or natural or anything. What if instead the accepted way to resolve the market was to just move the price to whatever you think it should be and then immediately close it? Clicking "resolve to YES" could be a macro to do just that -- move the probability to 100% (borrowing as much as necessary) and then immediately close the market. That would earn the creator some profit in an arguably more natural way. No need to fret about social acceptability (or reward jerks who don't care about such!). I think in many markets with sufficiently objective resolution criteria (and enough traders paying enough attention), the creator would make no profit. In the case of somewhat subjective criteria maybe the traders would feel cheated? In that case I'd advocate for a norm where the creator first explains their thinking about how they plan to resolve it and gives everyone a minute to trade based on that. I think rewarding people who are watching like hawks and help markets reveal truth in real time is great.
bought Ṁ5 of YES
I think it is unacceptable with DPM, but I'm not sure about CFMM. I don't have a good enough intuition for it. I don't think last-second trading is supposed affect other people's profits, so the market creator would only be taking money from themself?
bought Ṁ20 of NO
If you're about to resolve the market, you know the probability you're using for resolution. Using this to gain extra M$ would seem unfair to me.

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