Imagine a prediction market had an entry for whether or not someone would streak across the field during a Super Bowl. Someone might see this, buy into the market, and then go streak across the field to force the outcome to favor their position.
Prediction markets give financial incentive to force specific outcomes. They aren’t just observations: They become incentives to influence the outcome. The bigger the market, the bigger the incentive.
It’s not even theoretical. This actually happened (or rather was attempted with traditional betting markets, not prediction markets): https://www.insider.com/super-bowl-streaker-bet-on-himself-p...
Prediction markets give financial incentive to force specific outcomes. They aren’t just observations: They become incentives to influence the outcome. The bigger the market, the bigger the incentive.