The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone.
Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do that, we might as well just ban prediction markets altogether. I don't have a strong opinion either way on that, but a prediction market without insiders is pointless.
It is not a free market if there is insider trading. If insiders are trading other market participants are by definition getting screwed by what was advertised as a fair, impartial system.
You certainly wouldn't participate in a market where you did not think you had fair odds. Tho maybe you're inclined towards the rigging side of things.
Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets?
It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information.
Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the market was able to provide.
In prediction markets, allowing insider trading would be disincentive to participation by non-insiders, which would be a good thing, because the market should surface the most accurate information as possible and insiders have more accurate information than non-insiders.
> and has long been recognized as such.
Prediction markets are in their infancy. They've only really existed for about a decade and even now are tiny compared with markets like commodities or equities. So I don't see how this could have been "long recognized."
> It is outrageous for you to suggest that it is a good thing.
This is not an argument.
> You certainly wouldn't participate in a market where you did not think you had fair odds.
Of course I wouldn't and I wouldn't advise anyone else to do so. But why would we want uninformed people participating in prediction markets? I don't think they should.
What does "fair" even mean here? If Alice is more informed than Bob about X, she'll probably be better at making predictions about X. I guess it is "unfair," but what would the point of a prediction market be if we only allowed uninformed people to participate? Then it's more like a survey of what the average person thinks will happen, which is probably common knowledge, so we don't need a market to find that out.
> Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets?
Prediction market odds for elections and important world events are regularly quoted in the press and AFAICT seem to more accurate than pundits and and oped writers at predicting the future. A low bar, but still, if we are going to speculate about the future, we might as well see what actually informed people think.
The problem is that prediction markets are excellent vehicles for corruption as demonstrated by the article discussed here.
You're arguing that corruption is a good thing.
The fact remains that prediction markets and financial markets are not the same thing. Bets between people happened all the time, and you would wager based on information asymmetry, that is the whole point of it.
By making these markets public facing, you get access to this information asymmetry, whereas before it was behind doors, and these bets were already taking place, you just didn't know it, now you do.
Note also that prediction markets can't be too different from financial markets because prediction markets are in some sense a generalization of financial markets e.g. you can make a prediction market that predicts the price of some stock on some day.
Imagine if a CEO of a company does something that would damage the price of the stock of it's own company, having shorted the stock before? That's not insider trading, that's (probably, I don't know the exact term) fraud and will lead to prison sentence.
Prediction markets enable the policymakers to make these bets. Arguably, there should probably be sorts of limit on who is allowed to be there. But there are still counter examples like Nancy Pelosi who somehow manages to go around these limitations in stock market.
That's whats currently happening.
The wild thing is that prediction market dabbler rationalists who think they're betting on the outcome of a pre-written fiction story are actually just upping the reward for someone to come along and bomb people to death. Your participation is not neutral. You are culpable in the outcome of the situation you're "gambling" on which has not been determined yet and you are literally throwing fuel on the fire. No matter which way you bet it's fuel.
I'm sorry, I don't believe you personally deserve it but for the betterment of the everyone we have no choice but to shame people like you (prediction market rationalizers) via downvotes and hot replies until you can see through the limits of your overly simple model of reality.
I don't think you're a bad or stupid person, but when it comes to your views on prediction markets, they are very bad and very stupid. Thankfully you are not your beliefs and you are free to change them at any time. I beg you to reconsider this one.
Let's start of with something simple. Should a single wager between two people be illegal, should sports betting at all be legal? Is it only illegal if one or more entities facilitate the bet?
Don't poop in the public swimming pool and don't feed perverse war games that result in children and their parents being maimed and killed.
All anyone knows is that some bloke put money down an hour before the bet resolves.
They don’t know squat about what info those betters have.
Stop telling us the moon is cheese
