Earlier quoted context omitted.
ThAt's one of the interesting(?) aspects of prediction markets. Some meaningful percentage of people in the market need to be bringing some useful insight. If everyone is just making random guesses, the market isn't very useful (other than, perhaps, financially to the lucky).
What insights are being gained? Every time this topic comes up, I see someone vaguely mentioning insights from prediction markets. But no one ever has concrete examples - real or even hypothetical. Can you give an example of insights derived from prediction markets? Who benefited from the insights, and how did they act on the insights?
Other hypothetical prediction markets whose insights would be useful include those used in futarchy, a proposed government system in which decisions are made based on betting markets. The proposal: https://mason.gmu.edu/~rhanson/futarchy.html; some analysis: https://www.lesswrong.com/w/futarchy. In futarchy, prediction markets would be set up for, for example, “average happiness of citizens (as measured by regular survey) will increase in 1 year if Bill ABC passes” and “average happiness of citizens will increase in 1 year if Bill ABC does not pass”. The government would pass or reject proposed bills according to whichever market predicts higher happiness, and the market describing the event that did not happen would be closed and its money refunded.