[gruez]

>The problem with predictions markets is that they incentivize participants to distort the market in order to make their prediction come true (and thus receive a payout)

As opposed to the stock market?

>There's a reason that insider trading is illegal; prediction markets are inordinately susceptible to Goodhart's Law.

Insider trading is only illegal because you're abusing your position of trust as an employee. You having an incentive to make the stock go higher is totally fine. In fact that's how activist investing works. You buy shares in a company, use that to get control and turn the company around, and sell your shares in the now more valuable company.

[gmerc]

Not opposed. In addition.

https://www.bbc.com/news/world-europe-39664212.amp

The reason governments finally have gone hardball on crypto was the realization that it created an incentive for people to bet against and ultimately attack the shared economic system.

Silicon Valley bank run triggered by investors with well known crypto exposure was only the final straw

[foxhill]

yes, as opposed to the stock market; if i go buy AAPL calls, i can’t expect to manipulate apple’s share price by, say, buying a bunch of iphones.

conversely, i can’t buy puts, hoping that my stock sell off will effect them being in the money at expiry.

something something market forces and what not, but the long and short of it (no pun intended) is that.. if it were profitable, people would be doing it.

insider trading is illegal for numerous reasons, “abuse of trust” isn’t wrong, it’s just wholly incomplete.

[gruez]

>yes, as opposed to the stock market; if i go buy AAPL calls, i can’t expect to manipulate apple’s share price by, say, buying a bunch of iphones.

Did you miss my entire paragraph on activist investors? The only difference between them and you is that they're putting way more effort into it.

>insider trading is illegal for numerous reasons, “abuse of trust” isn’t wrong, it’s just wholly incomplete.

That's the canonical reason, at least in us securities law. https://en.wikipedia.org/wiki/Insider_trading#United_States_...