[jerf]

They don't work. They only work if all the participants in prediction markets don't notice their incentive to cheat the market. One example of many: https://moneywise.com/investing/cryptocurrency/polymarket-ri...

A market that only works as long as participants in the market also pretend that they aren't in a market is nonfunctional.

Let all reasoning be silent when experience gainsays its conclusion. The beautiful libertarian theories have failed.

[jrflo]

I think this is far from widespread. It's very difficult to tamper with the majority of markets, and nearly impossible to do so without getting noticed (hence, the news story about this case).

[jerf]

I chose that example precisely because even by prediction market standards it shows the degree to which people will go to skew the market.

The much more popular method of making bets in a variety of ways to skew the system, use all the power of financialization to manipulate values of contracts independently of the underlying measurement, and everything that we're already seeing in quantity and abundance ruins the utility of the market as a prediction market.

You say it's really hard and can be neglected... I say it's already happening so much that the putative value of the markets is ruined. I wave at all the news already written about it and the ongoing flood of news that will continue. The system is fundamentally broken, does not work, and will never work. The theory only works if the value of the prediction market is somehow completely isolated from the value of the things under prediction, but the prediction market itself is the engine for destroying that assumption.