Is it acceptable for a market maker to bet on their own market with an OBJECTIVE resolution criteria?
15
64
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resolved Feb 11
Resolved
YES

Here's how this works. I'm trying to figure out what Manifold norms & consensus are on various behaviors.

A big reason I create markets is because nobody has created them yet, and I want to make bets on those conditions! But sometimes it's tricky to specify a super objective resolution criteria from the get-go, and sometimes you can't really escape subjective resolution criteria, but you CAN be honest and up front about it.

So this leaves me in a position where I want to know under what circumstances Manifolders generally consider it okay for a market creator like me to make big bets in a market I myself created, provided it has an subjective resolution criteria.

So I created a market about that question:
https://manifold.markets/LarsDoucet/is-it-acceptable-for-a-market-maker

THIS particular market, however, is about the other case: when a market creator's market has essentially an OBJECTIVE resolution criteria. Is it okay for them to make bets (even big ones) on those markets?

Resolution criteria for THIS market:

  • I won't bet on this market

  • I will resolve it -- subjectively! -- based on the most persuasive arguments I hear in the comments

  • I will also take into account the voted probability, but just as weak additional evidence, so don't try to mechanistically manipulate the market resolution outcome on that basis

  • I'll resolve as soon as I'm convinced or within a week from now

If you have an opinion you'd like to register, note that I take persuasive comments as much stronger evidence than just betting up/down. Betting up/down is essentially a bet about what you think I'll be convinced by and will only minimally influence my resolution.

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Resolving YES.

predicted YES

Another note is that it's not always clear in advance whether the criteria are truly objective or subjective. Many questions that seem objective turn out to contain unexpected ambiguities - those are often the trickiest ones to resolve because if everyone knows the question was supposed to be subjective they trade accordingly, but if everyone thought it was objective but then it turns out that there were ambiguities, that gets really tricky.

Here's just one example of a seemingly-objective question containing unexpected ambiguities: https://manifold.markets/jack/will-george-santos-rny-begin-servin - there are quite a few others.

predicted YES

Yes, in general I say it's totally acceptable.

However, I think there are a couple cases that can be a concern for author trading even with objective resolution criteria:

  • If you have insider knowledge of the outcome where there's an implicit expectation that you won't trade on it. Personal markets are fine as long as expectations are aligned. But if I created a market "guess what number I'm thinking of" I think it's implicit that I shouldn't bet on it myself unless I explicitly state otherwise.

  • Manipulating the market outcome for profit can be considered unacceptable depending on the manipulation

Generally, I would say it's fine to trade on your own markets unless there's a specific reason it's a problem or violates norms/expectations.

I think it's fine, but it would be best if Manifold excluded profits made from people's own markets on their profit graphs.

Even if the criteria are objective, market creators tend to have an advantage. For example, I think it's questionable that I bet in this market today, since I could influence the outcome. And even for betting in 'will North Korea launch a nuke by X' markets, the creator has an advantage since they can resolve instantly after putting Mana in (meaning they don't need to worry about liquidity shortages)

@finnhambly I could not disagree more. You are conflating ability to determine timing of resolution with timing of events. Market creators have no trading advantage over the person who makes the trade faster than them. And under no circumstances is quick resolution bettter for winning readers than a delayed resolution because the more people on the other side the more you can make. Plus resolution quickly limits unique trader bonus so it is disincentivized already.

@finnhambly Plus everybody can get tranched @Spindle

@BTE it's not great if there's a long delay in resolution for bettors, but fair enough! It's a pretty minor aspect of things

@finnhambly I always assume a market will remain unresolved until the closing date even if the resolution criteria has been met. The loan feature makes it so this does not harm having their mana tied up for an extended period.

bought Ṁ80 of YES

Definitely should be ok! We want more markets created and if it's frowned upon to bet in markets you create then that's less incentive to create them.

bought Ṁ100 of YES

I have only once seen a complaint from anyone objecting to a market maker betting on an objective market that they had no way of affecting. The complaint was from a new user and it was quickly explained that this didn't affect their payouts, and then they didn't complain again

The only time betting by market maker is faux pas is if they state in the description they won’t bet in the market. I do this sometimes but usually because it’s a popular market I know nothing about. I wish we could still add and withdraw liquidity to markets because then I would rarely bet on my own markets because they would be less likely to be badly mispriced, which is the main reason I bet on my markets or anyone’s really.