{"items": [{"author": "George", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618752113682", "anchor": "fb-618752113682", "service": "fb", "text": "Betting is not a tax on bull shit at all unless you know it isn't a hedge. Please enjoy this example of the exact problem I am describing: http://delong.typepad.com/.../noah-smith-wins-the-game-of...", "timestamp": "1372895795"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618756609672", "anchor": "fb-618756609672", "service": "fb", "text": "George: I think most bets are hard to arbitrage-- \"For the same reasons that portfolios don\u2019t reveal beliefs, high transaction costs and few assets relative to states of the world, it\u2019s going to be difficult to arbitrage all bets. Many bets in effect create a new and unique asset that can\u2019t be easily duplicated and arbitraged away in other markets. I once bet Bryan as to what an expert would answer when asked a particular question. Hard to arbitrage that away.\" http://marginalrevolution.com/.../07/bets-and-beliefs.html", "timestamp": "1372898488"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618756909072", "anchor": "fb-618756909072", "service": "fb", "text": "Jeff-- your reasoning about biases and inaccuracies would be fully right of biases where always larger than biases. But I would want to use a random model for inaccuracies with e.g some distribution centered on the correct answer. If that distribution is wide enough compared to biases, you'd still be almost right.", "timestamp": "1372898653"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618758171542", "anchor": "fb-618758171542", "service": "fb", "text": "@George: the easiest bets to arbitrage are the ones lots of people are interested in (ex: inflation rate) and then are also the ones best suited for prediction markets. Once it's all out in the open the arbitrage opportunity goes away.", "timestamp": "1372899615"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618758495892", "anchor": "fb-618758495892", "service": "fb", "text": "@George: in the absence of a prediction market, another option would be for me to only make bets publicly, posting them somewhere on my website.", "timestamp": "1372899779"}, {"author": "Andrew", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618759888102", "anchor": "fb-618759888102", "service": "fb", "text": "Is any investment in the stock market betting? Is betting a form of entertainment? If you lose $100 having fun at a crap table, is it different from spending $100 having fun at a concert? Is hedging your bet (or other investment) OK? Is insurance a hedge bet?", "timestamp": "1372900699"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618760147582", "anchor": "fb-618760147582", "service": "fb", "text": "Even if someone is arbitraging, aren't bets still (in aggregate) a tax on bullshit? Even if Jeff is arbitraging, isn't he providing a valuable service? Betting markets are essentially arbitrageurs posting all their bets publicly.", "timestamp": "1372900883"}, {"author": "Andrew", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618760955962", "anchor": "fb-618760955962", "service": "fb", "text": "Saying \"betting is a tax on bs\" is vague. More accurate would be that one kind of betting is a tax on bs, and it's a small subset of the world of betting. The \"tax on bs\" only really applies to the \"put your money where you mouth is\" kind of bet, which isn't most betting.", "timestamp": "1372901463"}, {"author": "Jim", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618760980912", "anchor": "fb-618760980912", "service": "fb", "text": "Seems pretty simple: you should never pay money to increase your volatility, but being paid money to do so is fine, and often desirable. Or in other words, only take bets that have positive expected value. If you try to draw the line at \"don't bet\", then you immediately run into trouble with the corner-cases of the word \"bet\". Is it a bet if you buy stock that you expect to increase in price? What if it's a commodity, instead of a stock, and you plan to resell it? What if it's a commodity that you plan to use, but much later, when you're expecting a price increase? For that matter, buying a house (as opposed to renting) is gambling too, and a lot of people lost their shirts that way recently.", "timestamp": "1372901483"}, {"author": "Andrew", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618763216432", "anchor": "fb-618763216432", "service": "fb", "text": "I think that most sensible bets would be \"fair game,\" speaking literally. The idea of a bet is that both sides try to predict a chance outcome, and one side wins. You flip a coin, and each side puts up even money. You bet on the roll of a single die, and you bet 5 to 1 (or 1 in 6) and so forth. If \"the house\" is providing some service, then they take a known \"house cut.\" A fair game of chance is fair, I don't really see the unfair or bs aspect.", "timestamp": "1372903014"}, {"author": "George", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618771524782", "anchor": "fb-618771524782", "service": "fb", "text": "Forget arbitrage. My point is that you have to look at the entire portfolio of the bettor (including hard to quantify non-financial payoffs) before you can really view the bet as an indication of their beliefs. People make bets all the time that don't reflect their beliefs. Insurance is an example, but so are many bets between friends or betting on an outcome you would find personally unpleasant to reduce your risk. If I take an umbrella with me to work, does that mean I am betting it will rain? No, I might believe it isn't very likely to rain, but if it does I really don't want to get wet and I am willing to pay a certain cost to protect myself from this event I think not especially probable.", "timestamp": "1372908785"}, {"author": "Todd", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618783770242", "anchor": "fb-618783770242", "service": "fb", "text": "George Aren't you at least betting that there's a chance it will rain? If you were confident that it wouldn't rain, you wouldn't bother with the umbrella. You can think of it like Jeff's lotteries- you're paying a small cost repeatedly (taking an umbrella) for a small chance at a large gain (avoiding getting rained on when it does rain).", "timestamp": "1372914654"}, {"author": "Sasha", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618794493752", "anchor": "fb-618794493752", "service": "fb", "text": "If someone's stupidity isn't a fixed quantity, ie they could deliberately act in ways to diminish or increase it, then taxing them for it provides them with an incentive to get smarter, in which case it's positive-sum.", "timestamp": "1372934730"}, {"author": "Julia", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=618798306112", "anchor": "fb-618798306112", "service": "fb", "text": "The one time I saw people actually bet in a social context, at least one of them ended up made at the other because they didn't define the terms of the bet well enough and both thought they had won.
I prefer the method you've used in the past, Jeff, which is to agree \"On x date we will check in and see who is right about this.\" People usually care more about their reputations than about the sums of money involved in such bets.", "timestamp": "1372942139"}, {"author": "Peter", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741759565762", "anchor": "fb-741759565762", "service": "fb", "text": "Note, buying an insurance policy is a bet and a hedge. It is a bet that decreases volatility, but has negative expected value. I'd be surprised if any Quaker guides discouraged buying such policies or even participating in underwriting them.", "timestamp": "1438708889"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741767245372", "anchor": "fb-741767245372", "service": "fb", "text": "@Peter: I think Quakers have been fine with insurance historically, mostly because they function very differently than bets do socially. I think most of it is that insurance is to counter something that's effectively a bet in the other direction (hedging) and so it's much harder for people to get excited about it and blow all their cash on it. (Raising volatility tends to give more of a rush?)", "timestamp": "1438712964"}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741790229312", "anchor": "fb-741790229312", "service": "fb", "text": "Another phrase for many kinds of insurance is \"pooling of risk\" think fire insurance: low probability of occurrence, but high cost if it does.", "timestamp": "1438723510"}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741791561642", "anchor": "fb-741791561642", "service": "fb", "text": "Sadly gambling is not a tax on those bad at math. My uncle (accepted to MIT, but couldn't afford to go, it was the depression) bet the horses (or ponies;-), dogs and cards. He could do math, but there was some other emotional issue. I have a friend o who is a CPA, pretty much the same thing. That said, it is easier for those who are bad at math and sampling to fall into an abyss.", "timestamp": "1438723730"}, {"author": "Steve", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741798128482", "anchor": "fb-741798128482", "service": "fb", "text": "ears ago I taught my boys to play poker. Alice (my wife) asked me why I was teaching them to gamble. My reply was that poker is not gambling. It is a skill based on probability and psychology, not very different from most choices we make in life. Risk is everywhere and it is important to not only understand it but to have practical experience dealing with it. Of course I was shading a bit when I said this. It depends on what you mean by gambling. The first thing one needs to do (as stated very well elsewhere in this thread) is define betting and how it relates to other risk based decisions we need to make. That gives it useful context.", "timestamp": "1438726713"}, {"author": "Manoli", "source_link": "https://www.facebook.com/jefftk/posts/618743201542?comment_id=741847973592", "anchor": "fb-741847973592", "service": "fb", "text": "https://en.m.wikipedia.org/wiki/Friends_Provident", "timestamp": "1438757892"}]}