> it gives very powerful people a vehicle to make lobsided bets on outcomes they control

I'm sceptical that prediction markets uniquely enable this. Like, if you want to bet on U.S. airstrikes in the short term, you could always buy oil options (or short exposed companies). If you're in for the long term, you're buying something that benefits from cheaper gas, e.g. an additives company.

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dragonwriter a day ago | parent | next [-]

All of these things are much more subject to the problem that effects policy generally: the law of unintended consequences. Betting on the policy, rather than an intended/expected longer-term outcome that is easily derailed by intervening events outside of your direct control is much more direct (plus, if you are corrupt enough to bet on policy you control, that policy is probably already seeking a longer-term aim that serves your existing financial interests, so the ability to bet on the policy itself makes the corruption more attractive by providing a more immediate and certain payoff on top of the longer-term, less certain one.)

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bs7280 a day ago | parent | prev | next [-]

You are not wrong, and I should clarify I also have a big problem with the current state of legal insider trading of elected officials, but this polymarket problem is much more extreme. You can get a guaranteed 100-1 payout by blowing up some random people on the other side of the planet. Way worse than making even 2-5x on a leveraged futures bet with insider info. In that example, the victim is usually just other rich people.

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JumpCrisscross a day ago | parent | next [-]

If we want to go turtles all the way down, we could create a market to predict trading by decision makers and thus incentivize leaks from the betting markets.

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eru 11 hours ago | parent | prev [-]

Well, insider trading should be legalised in general. It would be better for the general public.

See https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...

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tim333 3 hours ago | parent | next [-]

So if you buy stock in company A, have it go to zero because the business went bust, find the CEO already knew it was bust when he was selling the stock to you, you'd be fine with that?

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graemep 8 hours ago | parent | prev [-]

It would deter those who are not insiders from investing as returns would shift from them to insiders.

As the biggest social benefit securities markets provide is to enable raising capital this is a huge drawback and makes things worse for the general public.

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eru 6 hours ago | parent [-]

> It would deter those who are not insiders from investing as returns would shift from them to insiders.

Retail investors should be index funds anyway.

Until fairly recently there was no 'insider trading' you could get in trouble for in commodities in the US. That hasn't stopped non-insiders from trading in commodities.

Also, even if insider trading is legal, that doesn't mean your company needs to allow it: you can still punish your own employees for it, and eg claw back bonuses and sue for breach of contract and breach of fiduciary duty.

The main thing the (American) laws against insider trading does what private contracts can't do is to make the golf buddy liable, too.

In any case, American insider trading regulation is already laxer than French insider trading law. And it doesn't look like French companies have an easier time raising capital.

	▲	graemep 6 hours ago \| parent [-]
		> Retail investors should be index funds anyway. That does does not solve the problem as insider traders will still be shifting profit to themselves. You still need non-insiders (not necessarily retail investors) to make the market work - even for insider trading to work you need a non-insider to trade with. > Until fairly recently there was no 'insider trading' you could get in trouble for in commodities in the US. That hasn't stopped non-insiders from trading in commodities. Can you show that it had no impact on how non-insiders traded? How recently was recently? > Also, even if insider trading is legal, that doesn't mean your company needs to allow it: you can still punish your own employees for it, and eg claw back bonuses and sue for breach of contract and breach of fiduciary duty. A lot less of a deterrent, and a lot of people with access to inside information have a lot more to gain than to lose. > In any case, American insider trading regulation is already laxer than French insider trading law. And it doesn't look like French companies have an easier time raising capital. Both do have insider trading laws so both are probably good enough, and there are a lot of other variables.

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jlawson a day ago | parent | prev | next [-]

Prediction markets don't uniquely enable it, but they make it far more effective and easy.

Insider trading is illegal. And for trades that aren't technically insider trading, often having some information ahead of time isn't as useful as it seems. Markets are known to react unpredictably to news; sometimes they move the opposite way from what you'd think, especially over the mid-long term, and there are many other influences on the price.

With a prediction market though, if you know what'll happen in the world, you know exactly what you'll win in the market.

	▲	eru 11 hours ago \| parent [-]
		> Insider trading is illegal. Only in some markets and in some jurisdictions and some of the time. Eg until fairly recently 'insider trading' in commodities wasn't anything you were punished for in the US.

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monero-xmr a day ago | parent | prev [-]

You can also just... not place bets on completely bizarre prediction markets like "how many times this person says this word". The market can sort it out, etc.

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bs7280 21 hours ago | parent [-]

You have completely missed my point. I don't give 2 shits about people losing money gambling. I give a shit about the Whitehouse doing insane things just so they can use the insider information to personally make money. Did you know on Oct 10th someone made $200M on a BTC short position made 30 minutes before Trumps announcement of 100% tariffs on China?

	▲	monero-xmr 19 hours ago \| parent [-]
		People make short positions all the time in crypto, and long, and levered long and short, because of hedging. Same in equities market