We study trading gains and losses on Polymarket, the largest prediction market. Using 588 million trades ($67 billion in volume), we show that the gains are highly concentrated: the top 1% of users capture 76.5% of profits. Successful traders provide liquidity using limit orders that resolve favorably relative to realized outcomes while unsuccessful traders take liquidity using market orders. Monthly performance is weakly persistent, however, this may represent sample selection rather than skill. A detailed analysis of the trading behavior of the most successful accounts suggests that "insider'' trading is unlikely to explain the performance of the largest winners.
insider trading on events probably wouldn't show any trends, right? These are point in time events (they call them markets), but they are finite and short lived. An insider would be a one and done thing, so it would be pretty hard to spot them or trend any sort of month over month insider scheming imo.
Also...
> We study trading gains and losses on Polymarket, the largest prediction market
This is not a natural thing to say and I fucking hate that it's impossible to know anymore if I'm wasting time replying to an AI/bot or not
vcf 5 hours ago [-]
Not meant to sound like AI, but most academic journals limit abstracts to 100 words, so they rarely feel natural...
I agree: insiders are hard to study because they are finite and short-lived. We're pretty confident there are insiders out there trading on Polymarket; however, our conclusion is that they don't account for a significant fraction of the total trading gains on the platform.
philipwhiuk 5 hours ago [-]
I agree - you're not going to be an insider on a significant proportion of trades and it would be stupid to use the same account for more than a couple.
Insiders are going to be earning large amounts in single trades, either by betting a lot when it's odds-on or a small amount when it's out the odds (for a large return).
I think it's just bad tense, which I think makes it not AI amusingly.
SamTinnerholm 6 hours ago [-]
Nice paper, and thanks for releasing the dataset.
The "top-1% winners are patient limit-order liquidity providers, not insiders" finding is interesting, and I'd love to see it extended cross-venue.
I work on tooling that normalizes orderbooks across Polymarket, Kalshi, Limitless, and Smarkets. From that angle, a lot of what looks locally like skilled Polymarket market-making turns out to be cross-venue arbitrage that happens to land on Polymarket. The same underlying question routinely trades 3-8% apart across venues for hours at meaningful depth, and a fast multi-venue stack rests limits on the lagging book at the exact moments the leading book moves. Locally that's indistinguishable from disciplined liquidity provision; cross-venue it's closer to FX triangular arb on the consensus price.
If your timestamps are fine-grained enough, a clean follow-up: for the top 1% of Polymarket profit-takers, what fraction of fills land within N seconds of a same-question move on Kalshi or Limitless? If it's materially above baseline, some of "skill" resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha, so it could partly explain the weak monthly persistence you observe (the cross-venue gap closes when too many players run the same stack).
This might also be consistent with your insider-trading conclusion rather than against it: an insider on a real-world event has every reason to hit the lowest-friction venue with aggressive market orders (Polymarket: permissionless wallets, no KYC, no withdrawal limits). That's a fundamentally different profile from the patient limit-posting strategy your top bucket runs, so the two populations cleanly separate in the data even if both are present.
WalterBright 3 hours ago [-]
I couldn't make heads or tails of that prose.
postflopclarity 2 hours ago [-]
because it's AI slop
vcf 5 hours ago [-]
We have a grad student working on matching markets across venues. Not a trivial task at scale, but we hope to look at that eventually.
meric_ 2 hours ago [-]
I'd be very cautious how matching works. For some markets like sports it's trivial, but many politics or economics markets have minute rule differences that dramatically change what the actual market is betting on. Many markets have identical titles but are actually totally different markets.
Karrot_Kream 2 hours ago [-]
I don't know why cross venue arbitrage would be unskilled? There's a lot of it for the taking and I, and others, do so.
5 hours ago [-]
locallost 5 hours ago [-]
I don't think that's surprising because the alternative would be that some people are able to predict the future. Whatever strategy one might figure out that works is long term destined to fail, as other people start using them. The only real way to make money there is by providing liquidity since it's a zero sum game. For the stock market this is not true because it's not zero sum, it grows over time.
cortesoft 4 hours ago [-]
There is alternative to being “able to predict the future”, which is “I already know the future” or “I can change the future”
mathgradthrow 3 hours ago [-]
Someone flips a coin and looks at it, what orders are you willing to put in?
The potential for insiders should be represented by a complete loss of liquidity.
tsimionescu 3 hours ago [-]
And yet, many people bet on things like the duration or contents of press conferences, of pre-taped shows, etc.
tsimionescu 3 hours ago [-]
There are some bets on prediction markets where the future is either already known or in the control of people who may be participating in the market. For example, when people bet on how long the next presidential briefing will be, it doesn't take a prophet to predict this, anyone who organizes said briefing can control it (at least with a very high probability).
So, the question becomes "what is the preponderence of such bets" and "how many people with control or knowledge of bet outcomes actually participate in the market" - not "can some people see the future of any bet better than others".
locallost 45 minutes ago [-]
This still doesn't mean they are good at it. For them it's like flipping a coin with two identical sides. It's just cheating.
Retr0id 4 hours ago [-]
"predicting the future" and "correct analysis of all available information" often aren't all that different.
glitchc 4 hours ago [-]
A sufficiently large market is indistinguishable from Brownian motion.
11101010010001 3 hours ago [-]
That's a model.
AnimalMuppet 4 hours ago [-]
From Schlock Mercenary (quoted from memory, may be inexact):
"You cannot see the future. All we are given is the present."
"Of course. But if you look closely at the present, you can find loose bits of the future just laying around."
dheera 4 hours ago [-]
Not really. Not all players in prediction markets are rational players. A good chunk of it are there for entertainment, and analyze things incorrectly; you can take the other side of those trades, and you won't need to predict the future.
Retr0id 3 hours ago [-]
Deciding that someone else's prediction is wrong is a prediction in and of itself.
3 hours ago [-]
3 hours ago [-]
vcf 4 hours ago [-]
Yes, but the alternative (that some people are very good at forecasting) is also plausible. It's also useful to have a good prediction model and timely data sources when providing liquidity. We also find that some of the "biggest losers" also provide liquidity; they just aren't as good at it.
locallost 47 minutes ago [-]
I don't know. Buffett had a good example of, if you organized a national coin flipping contest in the US, you would have people that won 25+ coin tosses in a row. Are these people good at calling coin tosses or is it just chance? You cannot reliably and long term predict if Bitcoin will go up or down within 5 minutes, or something similar. You can cheat maybe somehow, but that's not within the rules of the game.
vcf 18 minutes ago [-]
That's true, but you can invest in your infrastructure and data sources to be faster than most traders, which allows you to provide liquidity with a smaller spread (and snipe the slower traders that try to provide liquidity)
dheera 4 hours ago [-]
The stock market is arguably zero sum as well, just that directionally betting on the US has generally worked during the golden years of the US economy.
The stock markets of the world aren't a money printer.
FabHK 3 hours ago [-]
The stock market is not in the least zero sum. That's just a fundamental misunderstanding. There's dividends, capital allocation, etc.
dheera 2 hours ago [-]
There is only so much real money in the world, and that is determined by the Treasuries and Feds of the world. There are only so many dollars that were ever created, so many Japanese yen that were ever created, and so many Turkish lira that were ever created.
The stock market is a wealth redistribution mechanism, not a money printer. Market caps going up are not equal to money being created. It's not like the shareholders could collectively cash out all of that market cap and spend it. If everyone sold all of their stocks and pulled fully out of the stock market until everything crashed to $0, everyone's cash would still sum to whatever the government printed.
neffy 1 hours ago [-]
Although the stock market isn´t in itself, it benefits from the second order effects of continuous money supply expansion, and long term processes progressively concentrating money into the financial system.
cluckindan 3 hours ago [-]
They can be in cases where investment lenders don’t have 100% capital requirements, but that’s generally no different from other banks.
empath75 5 hours ago [-]
There's probably also some hedging going on across accounts that look like directional bets.
postflopclarity 5 hours ago [-]
this comment was clearly written by AI. please don't do that.
SkyPuncher 2 hours ago [-]
Yes, there's an em-dash, but it reads fine to me.
postflopclarity 2 hours ago [-]
AI slop is often good at "reading fine" but the actual content is incoherent.
Retr0id 4 hours ago [-]
Not sure why you were downvoted/flagged, because you're right. It is also quite an insightful comment worthy of discussion so I'm a little conflicted.
pjc50 4 hours ago [-]
It looks completely fine and plausible to me. Which is worrying.
aaron695 19 minutes ago [-]
[dead]
skybrian 4 hours ago [-]
I don’t see why it’s AI, but even if it is, it’s better than most human comments so the complaint should be downvoted.
Retr0id 4 hours ago [-]
Take a look at the user's history, it's more obvious in context. It has a lot of claude-specific tells which are noticeable if you've spent time working with claude. AI-generated comments are against the HN guidelines https://news.ycombinator.com/newsguidelines.html#generated
nh23423fefe 4 hours ago [-]
phrenology
l23k4 2 hours ago [-]
SamTinnerholm started to consistently use emdash in their comments starting 11 days ago, before that none of their comments used emdash.
LLMs like emdash very much, humans don't use it very much these days.
postflopclarity 4 hours ago [-]
if you're not able to tell that OP's comment was AI slop, then you probably don't have much insight to contribute to the conversation either.
vcf 3 hours ago [-]
not AI slop, simply a copy paste if the abstract of the paper. journals in our field limit the allowed number of words, so the style can feel « unnatural » even when human-written
b40d-48b2-979e 2 hours ago [-]
Forget to swap accounts?
Retr0id 2 hours ago [-]
The abstract doesn't mention arbitrage at all
skybrian 4 hours ago [-]
Maybe the guidelines should be changed? Something about: don’t complain about comments just because they’re AI.
postflopclarity 4 hours ago [-]
I'm not complaining "just" because it's AI.
I'm complaining because it's AI, and also slop.
> resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha
anybody who actually trades knows that on these markets, "cross venue infrastructure" (aka vibe coding some exchange api integrations) is much less important / durable than actual alpha.
skybrian 3 hours ago [-]
That sounds plausible. Not a trader so I wouldn't know. Saying at least a little about what's actually wrong with it seems more useful than just saying it's slop, which gives me very little info over just a downvote.
postflopclarity 3 hours ago [-]
it's pretty easy to write basic trading api connectivity. the hard part is knowing what trades to send
even if we are very charitable and assume the comment refers only to like high-engineering-effort infra for trying to be super competitive on latency, that's still like the opposite of a durable edge, since everybody is looking at it. there's very little "hidden" knowledge and it's mostly a matter of elbow grease and careful engineering.
Retr0id 3 hours ago [-]
Slop aside, do you think it's reasonable to assume a decent fraction of those making consistent profits are arbitrage bots?
postflopclarity 3 hours ago [-]
arbitrage is a rather overloaded word that people use for all kinds of strategies but yes, I predict most of the most profitable and consistent accounts are not actually attempting to forecast the outcome of these markets from first principles
AmblingAvocado 2 hours ago [-]
Yes, just like the "don't say HN is becoming reddit" rule. If you think it's AI downvote or flag and move on, reading "this is AI" over and over all over the internet without any substantiation is tiresome.
postflopclarity 4 hours ago [-]
it's only "better than human comments" if you have no idea what profitable trading looks like. it's a very-very thin mildly convincing veneer over what is fundamentally slop.
perlgeek 5 hours ago [-]
> the top 1% of users capture 76.5% of profits
This seems to be similar to OnlyFans, and the economy at large...
vcf 5 hours ago [-]
Yes, power laws are everywhere. The exact shape of each distribution varies, however, and little is known empirically about the distribution of trading profits in financial markets.
amelius 4 hours ago [-]
Yeah if you look at the Boltzmann Wealth Model, where every actor gives away 1 dollar to a random person, and you repeat this, then if you start with an equal wealth distribution, you end up with an exponential wealth distribution. That shows how strong exponential curves are :) A few "lucky" individuals become very wealthy, while the vast majority of people end up with very little or nothing.
The effect is so strong that I'm starting to wonder if we should have laws against power laws, like we have in engineering when we try to make things stable.
Balgair 3 hours ago [-]
I mean, do we want the economy to be stable?
Not in a 'oh the rich don't so they control the media and so we don't' sorta way. But like in a 'lets educate people on the pluses and minuses, debate a while, and then come to an informed conclusion' sorta way.
Like, deep down, does the average person actually want a stable economy? Because it seems to me that there is an even split historically between the folks that want stability and a little patch of land and weekly rhythms, and the folks that just want to drunkenly burn couches in the street every full moon, or some such thing.
Not to be glib here at all. I like, would actually like to know the answer. Sorry if this comes off the cuff seeming.
pstuart 3 hours ago [-]
I have a dumbed down version of this question as variant of the Voight-Kampff test (Bladerunner) that goes like this.
You have 2 choices for how the world is shaped, pick 1:
A. You have a modest but comfortable home, a job that pays you enough so that you have what you need and can afford occasional luxuries (e.g., an annual holiday abroad), have good health insurance, access to education and childcare, etc. Everybody else has the same thing, and because of this you live in communities where the arts flourish because nobody has to worry about becoming homeless or destitute.
B. You live in magnificent mansion, one of dozens you own around the world (accessible via one of your personal Gulfstream jets). You have more money then you could ever spend in a lifetime (even recklessly). Your homes are staffed with obedient servants who cater to your every desire. I mean anything. You own them. Your mansions are on palatial estates with secure walls and guards to keep out the rabble outside -- who fight for scraps and are desperate enough to do any kind of work to keep your factories humming and printing cash.
I wouldn't hesitate to choose A because that's a world I'd love to live in and the world of B horrifies me. I don't say this as virtue signaling, it's my innate reaction.
I think that a significant portion of the population would love to choose B. And in some ways, some already have.
amelius 3 hours ago [-]
I think most people want to earn more the harder they work, and I think that is fine.
However, power laws basically spoil it because it gives a hard worker an exponential advantage, where they can (and will) use that money against other people who made different life choices.
mswphd 2 hours ago [-]
there is the other (significant) issue, that wealth (and its many benefits) are inherited, and by all indications the exponential advantage seems to pass down through generations (at least recently).
achenet 2 hours ago [-]
> power laws basically spoil it because it gives a hard worker an exponential advantage
s/hard worker/person with more capital/
I can make 500 euros from a day of consulting as a software engineer. That's a typical day, working remotely, 9AM to 5PM, with a nice long lunch break.
Minimum wage in Bangladesh is around $133 per month. Many workers in the Bangladesh garment industry work 12 hour days. I look at what they do, and think "wow that's really hard I could never do that, glad I don't have to work that hard to live".
Yet somehow, I have exponentially more money than they do. And, thanks to the beauty of our current system, I can go ahead and invest that in the stock market, and get even richer while basically doing nothing.
It would be nice if we lived in a word that rewarded hard work, but as far as I can tell, we don't, and never have.
Look at the institution of slavery. For literally thousands of years, there was "those who worked", and "those who had".
The system rewards decision making, not hard work.
Now, if you're a young tech worker working on an important project at a big company, yes, choosing to work hard, IN THAT SPECIFIC CASE is a good decision, and it'll be rewarded.
But if you're a child laborer in a Third World sweatshop? No, your extra hour at the office probably won't get you anything extra.
If you're a Roman Senator in the year 30BC, you don't get rewarded for your work, you get rewarded for deciding to have your slaves spend more time farming grapes for wine and less farming wheat because wine sells for a higher price, which means that with your good decision making, you can now hire more slaves, to farm more grapes, to make more wine, which you can make for more money.
And if you look at rich people today, what they have is probably closer to the Roman Senator than the Third World sweatshop laborer - they find a thing that people like to buy, and invest lots of resources (their money, other people's labor) into making that thing and selling it, and are rewarded with money.
amelius 49 minutes ago [-]
Just adding a note that making things is what people do naturally, and is what makes us human. People often say that without monetary incentives nothing would be made, but you just have to look at open source to know that that is just not true. (And yes, people make some money in open source sometimes, but you certainly won't find any filthy rich people there.)
pstuart 2 hours ago [-]
I agree that people want to be rewarded for their effort, and should be.
But putting in 12 hour days being an EMT and saving peoples lives vs 12 hour days working with Claude to boost conversion pipelines have wildly different economic rewards.
I'm not suggesting a Harrison Bergeron economy but its also clear that the current system is trending towards B and the game is rigged to ensure that.
We don't live in a meritocracy -- there's a fair amount of luck involved (being in the right place at the right time).
newfriend 2 hours ago [-]
You could go do A right now at a local level. You don't though, because you don't actually want to live that way. It reeks of virtue signaling despite your protest.
pstuart 1 hours ago [-]
> You could go do A right now at a local level. You don't though, because you don't actually want to live that way.
"A" by its very nature is a "group effort". I could definitely be a better citizen and volunteer more and donate to causes, but that is a drop in the ocean.
And I pretty much do live that way myself. I have a modest home that I still have a mortgage on and live pretty simply. I drive a refurb'd EV, dress like slacker, and seek community and connection over flashy toys. I admit that when I walk through the first class section to my seat in coach I am not without envy.
> It reeks of virtue signaling despite your protest
The test in my mind is the cost of B, of living in that kind of world. The fact that you only see virtue signaling in my words says more about you than it does me.
achenet 2 hours ago [-]
I really hate to call people stupid, but I would actually go ahead and call people who choose option B idiots.
I'm sorry if that offends anyone reading this, you can downvote me out of spite if that makes you feel better.
I say this because I read a while ago (like years) an article in the Economist showing that happiness in a society is correlated with equality - (sorry for the dash I am a human I just happen to use em dashes sometimes) not just amongst the poor, but also for the rich.
You'll note that rich people in highly unequal societies tend to struggle with mental illness more than in equal societies.
Money doesn't buy happiness. Being filthy rich won't heal the hurt in your heart. If you're too stupid too realize that, that's fine, enjoy your suffering, but I'd appreciate you having the honesty to admit that you're a deluded moron instead of trying to create completely false arguments for why the misery you're creating for yourself and others is actually a sign of anything less than pure human stupidity.
I couldn't find the original Economist article, nor the study it cited, but here's a link I found on Google.
>The effect is so strong that I'm starting to wonder if we should have laws against power laws
This is literally and unironically communism.
amelius 3 hours ago [-]
Why? You want to earn exponentially more than other people the harder you work? Instead of just linear?
nonethewiser 1 hours ago [-]
Let me be more specific. Communism constitutes one way to combat the power law via law. Not all forms of law combatting power law are communism.
bee_rider 3 hours ago [-]
Sigmoid wealth tax maybe?
trgn 3 hours ago [-]
that's what progressive taxation is
amelius 15 minutes ago [-]
Maybe, if you get the coefficients right.
fantasizr 4 hours ago [-]
these apps should load with this pie chart showing your likelihood of ever making a profit based on what they know about you. "YOU WILL LOSE MONEY ON THIS APP". Like the cigarette packs.
solarkraft 4 hours ago [-]
This is (possibly what you’re thinking of) a requirement in the EU for CFD trading providers. Providers have to (somewhat prominently) state in all of their ads what percentage of traders loses money using the product.
tencentshill 1 hours ago [-]
>99% CHANCE OF LOSS
Yeah but I'm not a sucker like those other 99 guys!
fantasizr 4 hours ago [-]
Interesting, would love to see that applied here. Every third ad is about how I can make money on the weather.
AlienRobot 3 hours ago [-]
Just look at lotteries.
I don't believe in them because when you consider operational costs, less money comes out of the lottery than goes in, so if everyone simply didn't bet on the lottery, they would have more money than if they bet on it.
But everyone who bets thinks "but what if I win?"
fantasizr 2 hours ago [-]
at least the lotteries and las vegas publish their odds. Losing to the terrible math is probably better than playing against someone with inside information.
goncalo-r 5 hours ago [-]
What's the baseline here - in a world where every person is betting randomly X times a month, what would the distribution look like? There'd still be a small percentage that wins most of it, right?
vcf 5 hours ago [-]
We don't know the exact benchmark, but your insight is correct. We provide a simulation similar to what you have in mind towards the end of the paper, but you can generate almost any distribution you want by fine-tuning a simulation...
Terr_ 4 hours ago [-]
To relate it to a more-general economic article that has stuck with me for a while:
> If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing.
Wait- why isn't there any conflict of interest statement provided in this paper?
vcf 5 hours ago [-]
Because it's not required and not common practice in our field at this stage. But none of us (I'm one of the authors) is affiliated with or has a financial interest in any prediction market platform.
HWR_14 5 hours ago [-]
Isn't it common practice and required to disclose a conflict of interest? Just not to explicitly say there are none.
vcf 4 hours ago [-]
Yes, when you submit for publication. In our field, you rarely see one for pre-prints, unless you have one to disclose.
dwa3592 5 hours ago [-]
Thanks for the clarification. Given the scrutiny on these platforms, this is timely done. Thanks.
emsign 4 hours ago [-]
In terms of damage to society it's irrelevant who the winners are within the Polymarket system, it matters how much the insiders playing on Polymarket have an effect to the outside world of politics and economics. If Polymarket gambling increases corruption and destructive effects on society it simply has to be regulated or made illegal.
manas96 5 hours ago [-]
Just curious but how are bets arbritated on these website?
Meaning who decides if an outcome was yes or no?
Answers to things like "Who will win the next Best Picture Oscar?" are fairly obvious and binary.
Can we make bets whose answers are not binary yes/no?
What about "Will celebraty X and Y break up?"? Does Polymarket go to X and Y to confirm if they broke up or something :D
Full dataset available at https://huggingface.co/datasets/vgregoire/polymarket-users
Also...
> We study trading gains and losses on Polymarket, the largest prediction market
This is not a natural thing to say and I fucking hate that it's impossible to know anymore if I'm wasting time replying to an AI/bot or not
I agree: insiders are hard to study because they are finite and short-lived. We're pretty confident there are insiders out there trading on Polymarket; however, our conclusion is that they don't account for a significant fraction of the total trading gains on the platform.
Insiders are going to be earning large amounts in single trades, either by betting a lot when it's odds-on or a small amount when it's out the odds (for a large return).
I think it's just bad tense, which I think makes it not AI amusingly.
The "top-1% winners are patient limit-order liquidity providers, not insiders" finding is interesting, and I'd love to see it extended cross-venue.
I work on tooling that normalizes orderbooks across Polymarket, Kalshi, Limitless, and Smarkets. From that angle, a lot of what looks locally like skilled Polymarket market-making turns out to be cross-venue arbitrage that happens to land on Polymarket. The same underlying question routinely trades 3-8% apart across venues for hours at meaningful depth, and a fast multi-venue stack rests limits on the lagging book at the exact moments the leading book moves. Locally that's indistinguishable from disciplined liquidity provision; cross-venue it's closer to FX triangular arb on the consensus price.
If your timestamps are fine-grained enough, a clean follow-up: for the top 1% of Polymarket profit-takers, what fraction of fills land within N seconds of a same-question move on Kalshi or Limitless? If it's materially above baseline, some of "skill" resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha, so it could partly explain the weak monthly persistence you observe (the cross-venue gap closes when too many players run the same stack).
This might also be consistent with your insider-trading conclusion rather than against it: an insider on a real-world event has every reason to hit the lowest-friction venue with aggressive market orders (Polymarket: permissionless wallets, no KYC, no withdrawal limits). That's a fundamentally different profile from the patient limit-posting strategy your top bucket runs, so the two populations cleanly separate in the data even if both are present.
The potential for insiders should be represented by a complete loss of liquidity.
So, the question becomes "what is the preponderence of such bets" and "how many people with control or knowledge of bet outcomes actually participate in the market" - not "can some people see the future of any bet better than others".
"You cannot see the future. All we are given is the present."
"Of course. But if you look closely at the present, you can find loose bits of the future just laying around."
The stock markets of the world aren't a money printer.
The stock market is a wealth redistribution mechanism, not a money printer. Market caps going up are not equal to money being created. It's not like the shareholders could collectively cash out all of that market cap and spend it. If everyone sold all of their stocks and pulled fully out of the stock market until everything crashed to $0, everyone's cash would still sum to whatever the government printed.
LLMs like emdash very much, humans don't use it very much these days.
I'm complaining because it's AI, and also slop.
> resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha
anybody who actually trades knows that on these markets, "cross venue infrastructure" (aka vibe coding some exchange api integrations) is much less important / durable than actual alpha.
even if we are very charitable and assume the comment refers only to like high-engineering-effort infra for trying to be super competitive on latency, that's still like the opposite of a durable edge, since everybody is looking at it. there's very little "hidden" knowledge and it's mostly a matter of elbow grease and careful engineering.
This seems to be similar to OnlyFans, and the economy at large...
The effect is so strong that I'm starting to wonder if we should have laws against power laws, like we have in engineering when we try to make things stable.
Not in a 'oh the rich don't so they control the media and so we don't' sorta way. But like in a 'lets educate people on the pluses and minuses, debate a while, and then come to an informed conclusion' sorta way.
Like, deep down, does the average person actually want a stable economy? Because it seems to me that there is an even split historically between the folks that want stability and a little patch of land and weekly rhythms, and the folks that just want to drunkenly burn couches in the street every full moon, or some such thing.
Not to be glib here at all. I like, would actually like to know the answer. Sorry if this comes off the cuff seeming.
You have 2 choices for how the world is shaped, pick 1:
A. You have a modest but comfortable home, a job that pays you enough so that you have what you need and can afford occasional luxuries (e.g., an annual holiday abroad), have good health insurance, access to education and childcare, etc. Everybody else has the same thing, and because of this you live in communities where the arts flourish because nobody has to worry about becoming homeless or destitute.
B. You live in magnificent mansion, one of dozens you own around the world (accessible via one of your personal Gulfstream jets). You have more money then you could ever spend in a lifetime (even recklessly). Your homes are staffed with obedient servants who cater to your every desire. I mean anything. You own them. Your mansions are on palatial estates with secure walls and guards to keep out the rabble outside -- who fight for scraps and are desperate enough to do any kind of work to keep your factories humming and printing cash.
I wouldn't hesitate to choose A because that's a world I'd love to live in and the world of B horrifies me. I don't say this as virtue signaling, it's my innate reaction.
I think that a significant portion of the population would love to choose B. And in some ways, some already have.
However, power laws basically spoil it because it gives a hard worker an exponential advantage, where they can (and will) use that money against other people who made different life choices.
s/hard worker/person with more capital/
I can make 500 euros from a day of consulting as a software engineer. That's a typical day, working remotely, 9AM to 5PM, with a nice long lunch break.
Minimum wage in Bangladesh is around $133 per month. Many workers in the Bangladesh garment industry work 12 hour days. I look at what they do, and think "wow that's really hard I could never do that, glad I don't have to work that hard to live".
Yet somehow, I have exponentially more money than they do. And, thanks to the beauty of our current system, I can go ahead and invest that in the stock market, and get even richer while basically doing nothing.
It would be nice if we lived in a word that rewarded hard work, but as far as I can tell, we don't, and never have.
Look at the institution of slavery. For literally thousands of years, there was "those who worked", and "those who had".
The system rewards decision making, not hard work.
Now, if you're a young tech worker working on an important project at a big company, yes, choosing to work hard, IN THAT SPECIFIC CASE is a good decision, and it'll be rewarded.
But if you're a child laborer in a Third World sweatshop? No, your extra hour at the office probably won't get you anything extra.
If you're a Roman Senator in the year 30BC, you don't get rewarded for your work, you get rewarded for deciding to have your slaves spend more time farming grapes for wine and less farming wheat because wine sells for a higher price, which means that with your good decision making, you can now hire more slaves, to farm more grapes, to make more wine, which you can make for more money.
And if you look at rich people today, what they have is probably closer to the Roman Senator than the Third World sweatshop laborer - they find a thing that people like to buy, and invest lots of resources (their money, other people's labor) into making that thing and selling it, and are rewarded with money.
But putting in 12 hour days being an EMT and saving peoples lives vs 12 hour days working with Claude to boost conversion pipelines have wildly different economic rewards.
I'm not suggesting a Harrison Bergeron economy but its also clear that the current system is trending towards B and the game is rigged to ensure that.
We don't live in a meritocracy -- there's a fair amount of luck involved (being in the right place at the right time).
"A" by its very nature is a "group effort". I could definitely be a better citizen and volunteer more and donate to causes, but that is a drop in the ocean.
And I pretty much do live that way myself. I have a modest home that I still have a mortgage on and live pretty simply. I drive a refurb'd EV, dress like slacker, and seek community and connection over flashy toys. I admit that when I walk through the first class section to my seat in coach I am not without envy.
> It reeks of virtue signaling despite your protest
The test in my mind is the cost of B, of living in that kind of world. The fact that you only see virtue signaling in my words says more about you than it does me.
I'm sorry if that offends anyone reading this, you can downvote me out of spite if that makes you feel better.
I say this because I read a while ago (like years) an article in the Economist showing that happiness in a society is correlated with equality - (sorry for the dash I am a human I just happen to use em dashes sometimes) not just amongst the poor, but also for the rich.
You'll note that rich people in highly unequal societies tend to struggle with mental illness more than in equal societies.
Money doesn't buy happiness. Being filthy rich won't heal the hurt in your heart. If you're too stupid too realize that, that's fine, enjoy your suffering, but I'd appreciate you having the honesty to admit that you're a deluded moron instead of trying to create completely false arguments for why the misery you're creating for yourself and others is actually a sign of anything less than pure human stupidity.
I couldn't find the original Economist article, nor the study it cited, but here's a link I found on Google.
https://leftfootforward.org/2017/03/people-are-happier-in-mo...
This is literally and unironically communism.
Yeah but I'm not a sucker like those other 99 guys!
I don't believe in them because when you consider operational costs, less money comes out of the lottery than goes in, so if everyone simply didn't bet on the lottery, they would have more money than if they bet on it.
But everyone who bets thinks "but what if I win?"
> If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing.
https://www.scientificamerican.com/article/is-inequality-ine...
Meaning who decides if an outcome was yes or no? Answers to things like "Who will win the next Best Picture Oscar?" are fairly obvious and binary.
Can we make bets whose answers are not binary yes/no?
What about "Will celebraty X and Y break up?"? Does Polymarket go to X and Y to confirm if they broke up or something :D