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Comment author: badger 01 April 2014 11:03:10PM 0 points [-]

What do you mean by applying Kelly to the LMSR?

Since relying on Kelly is equivalent to maximizing log utility of wealth, I'd initially guess there is some equivalence between a group of risk-neutral agents trading via the LMSR and a group of Kelly agents with equal wealth trading directly. I haven't seen anything around in the literature though.

"Learning Performance of Prediction Markets with Kelly Bettors" looks at the performance of double auction markets with Kelly agents, but doesn't make any reference to Hanson even though I know Pennock is aware of the LMSR.

"The Parimutuel Kelly Probability Scoring Rule" might point to some connection.

Comment author: Slackson 02 April 2014 10:29:39PM 0 points [-]

Sorry, should've been more clear.

I've started work on a rudimentary play money binary prediction market using LMSR in django (still very much incomplete, PM me for a link if you'd like), and my present interface is one of buying and selling shares, which isn't very user friendly.

With a "changing the price" interface that Hanson details in his paper, accurate participants can easily lose all their wealth on predictions that they're moderately confident in, depending on their starting wealth. If I have it so agents can always bet, then the wealth accumulation in accurate predictors won't happen and the market won't actually learn which agents are more accurate.

With an automated Kelly interface, it seems that participants should be able to input only their probability estimates, and either change the price to what they believe it to be if the cost is less than Kelly, or it would find a price which matches the Kelly criterion, so that agents with poorer predictive ability can keep playing and learn to do better, and agents with better predictive ability accumulate more wealth and contribute more to the predictions.

However, I'm uncertain as to whether a) the markets would be as accurate as if I used a conventional "changing the price" interface (due to the fact that it seems we're doing log utility twice), and b) whether I can find find the Kelly criterion for this, with a probability estimate being the only user input and the rest calculated from data about the market, the user's balance, etc.

Comment author: Slackson 01 April 2014 09:48:19PM 1 point [-]

Does it make sense to apply the Kelly Criterion to Hanson's LMSR? It seems to intuitively, but my math skills are too weak.

Comment author: Lumifer 26 March 2014 03:12:18PM *  5 points [-]

You want options (as in, the financial market instruments called "options").

A sufficiently deep and wide options market basically provides most of the market-expected distribution of the future value of the underlying.

Comment author: Slackson 26 March 2014 08:06:59PM 0 points [-]


Comment author: Slackson 26 March 2014 11:08:49AM 1 point [-]

So I've kind of formulated a possible way to use markets to predict quantiles. It seems quite flawed looking back on it two and a half weeks later, but I still think it might be an interesting line of inquiry.

Comment author: lfghjkl 23 March 2014 08:03:37AM 11 points [-]

Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's Law.

Comment author: Slackson 23 March 2014 11:00:27AM 6 points [-]

This doesn't always apply. It can, for example, leave you with an hour to kill at a train station, because you decided it would be really embarrassing to show up late for your ride to a CFAR workshop because of the planning fallacy.

Comment author: Benito 18 March 2014 06:15:20PM 16 points [-]

When I hit discussion, it keeps automatically redirecting me to the 'top posts' even when I click back onto 'new'. Is anyone else getting this?

Comment author: Slackson 18 March 2014 06:39:31PM 0 points [-]


Comment author: hen 17 March 2014 01:57:48PM 0 points [-]

Hmm, that's a very good idea. I tried blogging about work once, but I couldn't get myself to post regularly. I take it this is a common problem. Do you know of a good way to encourage that?

Comment author: Slackson 17 March 2014 07:07:43PM 1 point [-]

Shorter posts when you're starting is a step in the right direction.

Comment author: hen 16 March 2014 11:43:18PM *  2 points [-]

I've been trying to learn a difficult language for some time now. I've found the process to be pretty painful, and I'm prone to akrasia. I've been trying to come up with some way of effectively practicing that isn't horrible. This is the solution I've come up with:

First, I've found that reading and translating with other people is fun and engrossing, and I'm ashamed not to show up. So whenever I can, I find other people to read with.

When I have to do read alone, the best way seems to be to give myself a fixed amount of text to translate and a fixed amount of time, little enough that I'm rushing. I tell someone I'm committing to show them my translation afterwards (i.e. just that I've done it). This isn't pleasant, but the time pressure keeps me focused, and I'm proud of finishing when I do.

Comment author: Slackson 17 March 2014 12:14:41AM 1 point [-]

What could you do to make reading alone more pleasant, without a trade-off in productivity?

Comment author: Gunnar_Zarncke 16 March 2014 08:49:02AM *  1 point [-]

Part of the sequence could be about finding our place in society. Links about that:

This gives a solid picture of the value of traditions and customs. In a way this is a social analog to the cognitive system 1. The analogy goeing as follows: System 2 - reason = well-defined formal structures; System 1 - intuition = vague or unjustified customs and traditions

Comment author: Slackson 16 March 2014 09:38:03PM 2 points [-]

System 1 is the intuitive one, system 2 is the formal reasoning.

Comment author: trist 12 March 2014 03:00:19PM 36 points [-]

Irrationality Game: (meta, I like this idea)

Flush toilets are a horrible mistake. 7b/99%

Comment author: Slackson 13 March 2014 02:55:18AM 2 points [-]

"If it's yellow let it mellow, if it's brown flush it down."

This is one of the first things I remember learning, growing up with tank water.

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