alt Hacker News> What is this supposed to imply?
Wisdom of the crowd, same as guessing jellybeans in a jar. The exact average is wrong, but it's still pretty damn close because the guesses are likely to follow a normal distribution.
If the hump of the normal distribution of these guesses is around 4% (or whatever) odds on, the actual answer is unlikely to be far from that.
> You can't reasonably draw any conclusion from betting without understanding who is betting and why.
Irrelevant; Polymarket is the reflection of the bettors view. When they place their bets, they don't care which way this goes, they only care to predict the direction correctly.
Unfortunately, it could be a case of the tail wagging the dog - even if the IPO would have been successful without polymarket existing, now that they have a signal from polymarket it is likely to be used as one of the weightings when they determine the correct time to IPO.
Replies
Wisdom of the crowd has some fatal flaws that are especially important when it comes to things like IPOs.
- Most significantly, most scientific research focuses on things that are actually amenable to guesses with a normal distribution, like "amount of jellybeans in a jar" or "length of the border between country A and country B". An IPO is a binary choice where it either goes public or not. There is no correct value to converge to.
- It has been shown that as bettors gain more information about the bets of others, predictions lose accuracy and bettors converge to a consensus value instead. It seems to me that online prediction markets would be extremely prone to this as the bets of other people are all there in the market price.
- Prediction markets generally become more accurate as the diversity of the bettor pool grows. The users of polymarket and Kalshi heavily skew towards young men from certain socioeconomic groups, who may be biased towards one or the other outcome.
In the case of an OpenAI IPO, it seems likely multiple of these would converge as people start to fall prey to groupthink because "everybody knows that they'll IPO soon" in their local media bubble.
> Wisdom of the crowd
I checked Polymarket towards the end of February for the odds of US bombing Iran and they were vanishingly low. IIRC most bets were aiming for summer 2026. YMMV.