Market Dynamics and the Influence of Early Bets

In September, Kalshi, a US financial exchange and prediction market, won a legal victory enabling it to let people bet on outcomes such as which party will control Congress after the November elections. Is the return of political betting a good thing, or were regulators right to try to limit it? And do the same concerns about manipulation in political prediction markets apply to the stock market? We hear from Chicago Booth’s John Birge on whether trading on insider information might sometimes be positive.