Understanding Prediction Markets

Prediction markets, such as Polymarket, have gained attention due to their ability to reflect market sentiments around events like elections. Recently, substantial bets on Trump have led to a noticeable shift in the market, suggesting a 60% chance of his victory. This phenomenon raises questions about the potential manipulability of prediction markets, particularly when large bets can skew perceptions. Critics often express concern about a few individuals or entities being able to influence the predictions by placing large stakes, prompting a deeper examination of the integrity and informational value of these markets.