Prediction markets and the need for “dumb money” as well as “smart money”
Statistical Modeling, Causal Inference, and Social Science 2024-10-25
Summary:
tl;dr. Prediction markets give good forecasts because they attract “smart money” that will fix any gaps between current odds and best available information. The “smart money” is in turn motivated by the profits they can take from “dumb money” coming … Continue reading →