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Risks of Prediction Markets

aaronjmars·November 25, 2025·Twitter
Prediction markets aren't pure bets when insiders know the answer or traders can change the outcome

Why It's Worth Reading

Taxonomy categorizing prediction markets by susceptibility to three manipulation vectors: information asymmetry (insiders know outcome), reflexivity (market signals influence outcome), and social coercion (participants can directly cause outcome). Argues a market's manipulation profile determines whether you're trading on information edge, narrative momentum, or ability to cause the outcome.

Some technical background helpful

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