It makes them more accurate at the time the insider places the bet. But to maximise profit, they are incentivised to misdirect before they place the bet (and worse still from society's perspective, are incentivised to take counter-intuitive or downright harmful actions to profit at the expense of people who bet on the view that it made no sense for them to do that)

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tptacek 3 hours ago | parent [-]

How does this trade work? Nobody knows who the insider is, they only see market direction.

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notahacker 3 hours ago | parent [-]

You are a spokesperson or decision maker for an entity which is bet on, like a sports team or the government. You publicly indicate that you are going to do one thing (probably the thing that makes most sense), so the market bakes that into their assumptions and offers favourable odds for bets on doing the other thing. Then you place your bet shortly before you do the other thing.

(it's true that low level insiders might have limited influence on the actual outcome, but the current suspicion with prediction markets is that some of the participants do have that influence, or are being intentionally helped by people that can)

	▲	mbesto an hour ago \| parent [-]
		This gets into game theory and doesn't follow a predetermined flow like you're suggesting. It's a bit like playing poker...does the guy who just went all in have pocket Aces or not?