“when related contracts constrain each other, individually fair prices can still disagree”
Combinatorial prediction markets let traders combine legs across related events, and this paper treats the arbitrage relationships between those legs as the object of study. When contracts constrain one another, prices that each look fair in isolation can still be jointly inconsistent. The authors frame the resulting mispricings as a constrained optimization problem and ask when a bundle of positions admits a riskless profit.
Extensive technical background assumed