Insiders Guide To The Workings of The Betting Market Guide: The Pattern Seekers.
A liquid betting exchange betting market presents as an ambiguous, increasingly noisy and highly variable environment - basically a place in which people with compromised information processing abilities/deficiencies in critical and rational thinking, are likely to become emotionally over-whelmed very quickly. For many, trading in such an environment is akin to entering a strange forest with nothing but a torn map and the prevailing conditions expose a whole range of cognitive biases and other limitations. Firstly, in order to trade people must engage with a price - but, to a man, they suffer from some degree of signal extraction problem - what information does the price on offer at a particular moment in time contain? Second, in order to trade people must also either choose to have faith in their own beliefs or, to decide to have faith in the beliefs of others (the curse of cursedness). Both choices contain hidden dangers. Since time and financial resources are also limited, people consistently fail to interrogate the known data with any great rigour, and, indeed, they typically quickly fall back to using heuristics (mental shortcuts) and to rely upon learnt behaviours. Awareness, goals, desires and motivations are shaped by prior beliefs inferred from past experience; the brain picks patterns out of the environment solely on the basis of familiarity and attributes a salience to them (it is often guilty of aberrant salience attribution).
Until the event is terminated the betting market continues to throw up an unusual concatenation of circumstances. A majority of those trading in the market are trading on the back of incomplete information; assymetric information flows are the order of the day; numerous constraints (cognitive and otherwise) persist; beliefs and assumptions are not updated in the face of new information. Strong emotions drive attentional focus. Dysregulated dopamine function drives aberrant salience attribution. Stress, induced by financial and temporal constraints contributes to deficiencies in critical and rational thinking
- people display an impaired ability to think about thoughts and emotions. Prior expectations attenuate the discovery process. The pattern seekers seek patterns as a means of reducing uncertainty, ambiguity and confusion. The stick is a snake is a stick.. It stands to reason that when confronted with uncertainty we should always be wary of believing the first solution that springs to our mind.
When sensory input is weak, noisy, or ambiguous, expectation can bias perception: changing not only how well but even what is perceived (or heard).
Amazing: If you read "green needle," that's what you'll hear; if you read "brainstorm," you'll hear that instead. Also works if you just hold each phrase in mind. ?? pic.twitter.com/I6OV3qQl8e