Homework assignment


I think one of the most important aspects of prediction markets is to guarantee that the outcomes are not manipulated, therefore my examples deal with solutions to stop prediction market manipulation.

The first example mention the solution that when prediction markets have the idea that there is some manipulation going on, future voters will be warned with a pop-up. How prediction markets investigates a manipulation is by monitoring the odds of similar overseas uncapped markets and search for some big differences in a short period of time. The strength of this solution is that people probably won’t see the manipulated odds as a real reflection of reality and therefore avoids the self-fulfilling prophecy where cheaters make use of.

The other solution which is brought up, is the fact that users of prediction markets can bet only a limited amount of money, but this solution doesn’t deal with the fact that big organizations can combine bets from individual users. 

To conclude it is hard to control and monitor prediction markets for manipulation and I think cheaters will always find new ways to manipulate, but there will be more tools in the future to monitor manipulation.

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