tartoranA prediction market user made $436k betting on Maduro's downfall
can i bet on when prediction markets will collapse due to rampant insider bets?
How? Then why would non-insiders bet? The classic prediction market is guessing the weight of an elephant (or some animal) at a circus. The average guess of the crowd will actually get very close. But if someone knows the actual weight, no one would play.
The entire idea of a prediction market is to aggregate insider information. If you don't have insiders, you're not doing predictions, you're just doing gambling.
Granted: that's what almost every Polymarket user is actually doing. But that's a bad thing. The insider whales are the only ones actually using it for its intended purpose.
It's not 'predicting' when the outcome/answer is known. From the wiki entry on prediction markets "The main purpose of prediction markets are eliciting aggregating beliefs about an unknown future event."
I think you should probably read more about the background of prediction markets. Robin Hanson is a useful place to start. The whole concept of a prediction market is to convert private information into prices. That only works with "insider" information.
As I said in a parallel comment, Hanson was also thinking about scientific questions, where there are asymmetries in knowledge but people can often invest in research that improves their own knowledge (like by performing an experiment or a scientific expedition or something). So, Hanson believed that prediction markets could incentivize people to invest in scientific research in order to get an edge over other market participants in such questions. That doesn't exactly make them insiders, though.
Interestingly, it doesn't necessarily incentivize them to publish the detailed results of their investigations. They're incentivized to reveal what they expect to happen (based on how they bet), but not necessarily incentivized to reveal why they think so, or how they know. E.g. if you became able to predict the weather more accurately than other models over some timeframe, prediction markets would incentivize you to reveal (some aspects of) your predictions, but not your method for making those predictions.
He wrote a whole paper on this.
It's OK, I didn't have it in cache either, I just remembered "people like Robin Hanson have said insider trading on prediction markets is a feature not a bug" and GPT5 tracked it down for me. :)
It's a bit late to reply now, but Robin Hanson just weighed in on the current thing, or, if you prefer, doubled down:
https://www.overcomingbias.com/p/its-your-job-to-keep-your-s...
Apparently there's also something about the duration of a White House press conference where the press secretary may have been deliberately helping some people?
I continue to think prediction markets are potentially extremely useful and valuable, but I feel like there's a huge conceptual muddle about why people would (1) care about an outcome of a market and (2) be willing to bet on the outcome of a market. And perhaps (3) whom else they would be happy or unhappy to have participating in the market with them. I doubt people will be super-content with prediction markets until those issues are a bit clearer for more participants in any given market. (And I don't know exactly how we can make them so.)
I could go either way on prediction markets but I don't think the dilemma here is all that complicated. I think most people interacting with them are just valorizing gambling, and want a Nevada Gaming Commission to step in and make sure that the games are fair. They're not supposed to be fair! They're supposed to predict! It's in the name!