Author Topic: Computing via price-shifting vs. share-trading  (Read 2364 times)

somnicule

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Computing via price-shifting vs. share-trading
« on: June 25, 2014, 07:13:34 am »
There are two equivalent methods for LMSR markets. One seems to be favoured by Hanson where users set probability distributions and pay for these changes according to the worst-case difference in their  log score and the previous bet's. Alternatively, there's a buying and selling of shares interface, which is closer to the usual perception of market makers. I'm wondering if you all have any thoughts on the relative benefits of each, in terms of costs and the usability in tandem with SIB.

psztorc

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Re: Computing via price-shifting vs. share-trading
« Reply #1 on: June 26, 2014, 03:06:42 pm »
I think its clear that the first is the way to go. It isn't as bad for traders as it might seem (check out this: https://www.youtube.com/watch?v=ry3Fra9rHvA [advanced mode at 2:30] which uses LMSR).

Can you think of a way for a market to be deep and liquid, without everyone having their clients open or storing more data in the blockchain? Then, do people issue shares which are themselves traded p2p? The way I have it now, one is just holding different accounts.

One difference would be that I'm not sure how difficult it is to deterministically calculate the log-math and force different computers to get exactly the same answer (same precisions, etc), but I assume we can always round up to the nearest 8th decimal or something.

I don't agree with Inkling's decision to avoid using trading terminology (for example "submit your prediction"), I think it should all be 110% Wall St. style finance (none of this "explain your reasoning" nonsense, either). I don't get why they dont have the historical price chart right there, either. These are front end decisions.
« Last Edit: June 26, 2014, 03:10:09 pm by psztorc »
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