Will Manifold's developers agree with me that the dynamic parimutuel cost function should be changed?
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แน24Kresolved Mar 13
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YES1D
1W
1M
ALL
I believe that the dynamic parimutuel betting system as formulated by Manifold (described in the site's technical guide) significantly disincentivizes accurate price setting and should be changed. I have written a blog post arguing this point, which I intend to publish shortly. This market will resolve to Yes if Manifold's developers publicly state an intent to change their pricing implementation, and this market contributed in some way to their decision to do so. This market will resolve to No if this does not happen within a month (either because I become convinced that my argument is wrong, or if I still believe in it but the developers do not agree with me that it is an issue).
Fine print: This does not require a specific change to actually be implemented within the next month, as long as the developers publicly state an intention to implement a change. If a change is made to pricing that is unrelated to this market that does not count. In the unlikely event that a change is made but it is unclear whether it is or is not related to this market I will resolve to N/A. I have no inside information about Manifold nor any pre-existing relationship with its developers or with any other prediction markets.
Feb 17, 6:50pm: Here's the argument https://kevin.zielnicki.com/2022/02/17/manifold/
Feb 19, 9:40pm: Here's a TLDR summary of the issue, which I still believe is significant enough to justify a change to Manifold's betting system: If market odds change substantially over time due to arrival of new information, earlier traders will not get the payouts they were expecting from the odds at the time of their bet. This is a common occurrence in interesting prediction markets, many of one can even expect will go to nearly 1 or 0 by the time they close (which is the worst case for this issue). This significantly distorts incentives for accurate pricing.
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