After the Thunder who have clearly proven to be a top 4 team in the west, what are the next 3 best teams in the West Playoffs?

In the regular season, it's quite likely (~90%) to be 3 of Rockets, Nuggets, Lakers, Grizzlies with a slim chance (~10%) one of the Warriors, Timberwolves or Clippers ending up with a top 4 seed.

However in terms of odds to win the west, the markets think that the Top 4 teams are OKC (>50%), LAL (>10%), DEN (>10%), GSW (>10%)

with HOU, MEM, MIN, LAC each having <5% odds to win the west

How this market resolves:

A priori, we assume the market is generally correct and assign the 8 teams into 3 tiers of underlying odds to win the West

Tier 1:

OKC: 50%

Tier 2:

LAL/DEN/GSW: 10%

Tier 3:

HOU/MEM/MIN/LAC: 5%

Tier 4:

SAC/PHX/DAL/POR: 0%

Then to use the playoffs to update the underlying odds when team A eliminates team B, it "captures" half of team Bs odds to win the West.

So assuming the current seeding holds (for illustrative purposes)

1. OKC - 50%

2. HOU - 5%

3. LAL - 10%

4. DEN - 10%

5. MEM - 5%

6. GSW - 10%

7. MIN - 5%

8. LAC - 5%

Let's say LAC upsets OKC to make this interesting,

then LAC goes to 30%, OKC falls to 25%

then MIN beats HOU, going to 7.5%, HOU goes to 2.5%

LAL beats GSW, going to 15%, GSW drops to 5%

DEN beats MEM, going to 12.5%, MEM drops to 2.5%

DEN beats LAC going to 27.5%, LAC drops to 15%

LAL beats MIN going to 18.75% MIN drops to 3.75%

DEN beats LAL going to 36.875%, LAL drops to 9.375%

Summary:

DEN - 36.875%

OKC - 25%

LAC - 15%

LAL - 9.375%

GSW - 5%

MIN - 3.75%

HOU - 2.5%

MEM - 2.5%

in this scenario DEN, LAC, and LAL would resolve YES and MIN resolves NO even though they won the 1st round since it was against a Tier 3 team.

The general heuristic is to that to prove you are a top 4 team in the west, you have meet one of the criteria

1. Be a Tier 1 contender (OKC), so that even if you lose in the playoffs you retain at least half of the a priori 50% odds

2. Eliminate a Tier 1 contender (OKC) gaining half of their apriori odds (25%) in addition to the base odds of 10/5%

3. Eliminate a Tier 2 contender (LAL/DEN/GSW) to gain half of their apriori odds (5%) in additonal to the base odds of 10/5%

I may resolve to N/A if a tier 3 contender advances further than a tier 2 contender whilst only beating tier 3 contenders if the tier 2 contender lost to another tier 2 contender (e.g. if somehow the 2, 3, 6, and 7 seeds are all Tier 3 teams and 4, 5, 8 are Tier 2 then since the 2, 3, 6, 7 did not have to face a tier 2 team, it would be N/A to compare them to a Tier 2 team that lost earlier but to another better team (Tier 1 or Tier 2)

Generally achieving at least 10% at the end of the playoffs should be sufficient to resolve YES, 7.5% is probably yes depending on where the other teams land and 5% is probably NO, but I haven't analyzed the possibilities extensively so it may resolve N/A for teams that are neither definitively in or out of the top 4.

I know this is somewhat complicated/confusing criteria that even I don't fully grasp (yet), but the general idea of finding the top 4 teams using playoff results should make sense. The goal of the market is to determine if the betting market is justified to view LAL/DEN/GSW as a tier above HOU/MEM/MIN/LAC so that's why this market uses those tiers as a baseline to be updated according to the playoff results.