Everyone saying "respect" to Keith Rabois for this...and while I suppose its honorable to actually pay out...this was an idiotic bet––literally just a free gift of $36k to Geiger.
Rabois gave him even money on an outcome that was trading at 12-14% on prediction markets. Geiger could take the $50k bet, then go to the market and hedge it with a $14k bet on the Republicans (100k shares at $0.14).
If the Republicans won, he would lose the $50k bet to Rabois, but he would make 100,000 x (1-0.14) = $86,000 on the hedge.
Net winnings: $86,000 - $50,000 = $36,000
If the Democrats won, he would win the $50k bet with Rabois, but lose the $14k hedge.
Net winnings: $50,000 - $14,000 = $36,000
So by taking this bet, Rabois essentially just made a $36,000 EV donation to Geiger.
Not sure if the macho side of things overwhelmed him or what but it's hard to see how this ever makes sense from Keith's perspective.
Rabois gave him even money on an outcome that was trading at 12-14% on prediction markets. Geiger could take the $50k bet, then go to the market and hedge it with a $14k bet on the Republicans (100k shares at $0.14).
If the Republicans won, he would lose the $50k bet to Rabois, but he would make 100,000 x (1-0.14) = $86,000 on the hedge.
Net winnings: $86,000 - $50,000 = $36,000
If the Democrats won, he would win the $50k bet with Rabois, but lose the $14k hedge.
Net winnings: $50,000 - $14,000 = $36,000
So by taking this bet, Rabois essentially just made a $36,000 EV donation to Geiger.
Not sure if the macho side of things overwhelmed him or what but it's hard to see how this ever makes sense from Keith's perspective.
Wager has been settled. Man of honor.View quoted post on X