= 27d567bc2d48d9f40e9ccc20ea370b15)
Vaniver comments on "I don't know." - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (16)
There's no rational reason to do this. If you think that X has more than a 25% chance of being true given that the market is at 25%, you'd buy at 25%. If you think it has less than a 25% chance of being true, you'd sell at 25%.
There's no way you're going to think that it has exactly an 8% chance of being true given that the market is at 8% and exactly a 44% chance of being true given that the market is at 44%. If you're really more sure of the market than yourself, it will be close, but you can always improve it slightly.
Risk aversion and transaction costs are both real and reasonable things. If I think there's a 25% chance of X, and someone else thinks there's a 24% chance of X, it's not worthwhile for us to bet on whether or not X will be true, because there's so little money on the table and so much variability in whether or not X will happen.