Re:Andrew Yang and Pete Buttigieg Have Blown Up on Twitter, ...
by smallgovt on Thursday March 28, 2019 @03:59PM
(#19515974)
It's even worse than a straw poll. PredictIt's 5% withdrawal fee destroys any potential profit opportunity for new users betting against a candidate with low winning chances.
For example, if I were to sign up and bet against Yang at 5% odds, even if I won my bet, I'd make $0 profit because my entire withdrawal amount is taxed at 5%. If Yang's odds were set at less than 5%, I'd actually lose money even though I won my bet!
Given this, the market for low likelihood outcomes is extremely inefficient and it's very plausible that these odds are being gamed by candidates vying for attention.
For example, if I were to sign up and bet against Yang at 5% odds, even if I won my bet, I'd make $0 profit because my entire withdrawal amount is taxed at 5%. If Yang's odds were set at less than 5%, I'd actually lose money even though I won my bet!
Given this, the market for low likelihood outcomes is extremely inefficient and it's very plausible that these odds are being gamed by candidates vying for attention.