I think the dynamic you describe where betting for real money “incentives [people] to try to set the most unfavourable odds they can for the other party” is correct, but also good. Two rational actors will only engage in a bet if they believe it is +EV for each of them. In a zero sun bet, this is only possible if each actor assigns sufficiently different probabilities to the event in question. So actually in the case you described about the £10k bet, useful information was conveyed. You demonstrated that you were not sufficiently confident in your claims to offer better odds (ie. you didn’t think offering better odds would be +EV for you), which is fine. Obviously if you aren’t a frequent bettor, you have to be more worried about variance (getting unlucky and losing a bunch of money on a good bet that you’ll never recoup), but in general bets are actually good at teasing out someone’s probability distribution for an event occurring, and the dynamic you describe is an important part of that.
well obviously I could have offered way better odds (probably up to 50-1!) and it would have been +EV for me still, but I didn’t because I wanted to get the best possible price and assumed my opponent might engage in some negotiations (which they did not). So no, no useful information was conveyed other that I though there was a small chance my opponent on the other side of this hypothetical bet might have been dumb enough to take it at that price.
I think the dynamic you describe where betting for real money “incentives [people] to try to set the most unfavourable odds they can for the other party” is correct, but also good. Two rational actors will only engage in a bet if they believe it is +EV for each of them. In a zero sun bet, this is only possible if each actor assigns sufficiently different probabilities to the event in question. So actually in the case you described about the £10k bet, useful information was conveyed. You demonstrated that you were not sufficiently confident in your claims to offer better odds (ie. you didn’t think offering better odds would be +EV for you), which is fine. Obviously if you aren’t a frequent bettor, you have to be more worried about variance (getting unlucky and losing a bunch of money on a good bet that you’ll never recoup), but in general bets are actually good at teasing out someone’s probability distribution for an event occurring, and the dynamic you describe is an important part of that.
well obviously I could have offered way better odds (probably up to 50-1!) and it would have been +EV for me still, but I didn’t because I wanted to get the best possible price and assumed my opponent might engage in some negotiations (which they did not). So no, no useful information was conveyed other that I though there was a small chance my opponent on the other side of this hypothetical bet might have been dumb enough to take it at that price.