Megan McCarty Carino

There are no shareholders, as we mentioned, with commodities, but you could be trading on basically information that

doesn't fundamentally belong to you.

And so this idea that you owe a duty to some other party, if you do a bunch of research and you put satellites in the air and you do research on, you know, the crop health, like that's OK.

That's your own information.

But if you owe a duty to another party to keep that information confidential, that's insider trading.

Well, prediction markets, before their kind of current iteration as these platforms that are handling billions of dollars, they really started as this kind of intellectual experiment to see if you could harness the wisdom of the crowd to have better information, make better decisions.

And so there's this whole kind of intellectual history of

prediction markets as being information systems, as being these really powerful forecasting tools that you could use to, you know, predict, like, what will inflation do if this particular candidate wins?

Or, you know, how will rent control affect

housing prices in the market or something like that.

It's basically aggregating public opinion, but not just public opinion like a poll.

These are motivated participants who are putting money on their opinion.

And the idea is the more informed those opinions are, the better the signal that you're going to get from those markets.

And so the fact that prediction markets have sort of long been seen as primarily independent

information systems where you want the signal coming from them to be the most accurate.

The idea that you would have insider trading, which presumably is very good information, that's a very informed participant, that would be a good thing.

And I actually spoke to one economist, Robin Hanson at George Mason University, who compares insider betting on a prediction market to

to leaking information to a newspaper.

And the fact that they win money by doing so, that's just kind of an extra economic incentive to get important information into the public sphere.

You know, I think that view kind of comes into conflict with our moral intuitions for a lot of people when we think about, you know, profiting off of knowledge of war and things like that.