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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?
It’s not really a game when one player gets to decide the outcome. In poker, the guy who went all in can’t peek at your cards and swap out his hand at the last second.
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> A reasonable opposition party would declare the pardons invalid. Is that a valid interpretation of pardon power, does that undermine the legitimacy of our laws? No, in the USA the pardon power belongs to the President. Only a constitutional amendment could invalidate pardons.
There would still be a valuable public record produced by the investigation and court proceedings. Going after pardoned criminals is absolutely something the next administration should do. (We have zero precedent for preëmptive and blanket pardons in our courts, for example.)
“The power of pardon conferred by the Constitution upon the President is unlimited except in cases of impeachment. It extends to every offence known to the law, and may be exercised at any time after its commission, either before legal proceedings are taken or during their pendency, or after conviction and judgment.”
Nobody is going to waste their time investigating crimes that can't be prosecuted.
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> Prediction markets don't have any "natural" reason like that for excluding insider trading. No, they have a different reason. Consider the consequences of a sufficiently large prediction market bet on whether or not will be assassinated this year. Consider also the consequences of insiders and decisionmakers having an immediate financial incentive to take the other side of a bet whose outcome they control.
It's called assassination markets. There is a RFC on Bitcoin talk from 2011 https://bitcointalk.org/index.php?topic=26350.0
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A reasonable opposition party would declare the pardons invalid. Is that a valid interpretation of pardon power, does that undermine the legitimacy of our laws? Maybe, but not nearly as much as not punishing obvious and proud criminals does. That's the point of the rule of law, remember? It creates legitimacy, and therefore stability.
> A reasonable opposition party would declare the pardons invalid. Is that a valid interpretation of pardon power, does that undermine the legitimacy of our laws? No, in the USA the pardon power belongs to the President. Only a constitutional amendment could invalidate pardons.
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There would still be a valuable public record produced by the investigation and court proceedings. Going after pardoned criminals is absolutely something the next administration should do. (We have zero precedent for preëmptive and blanket pardons in our courts, for example.)
Ex Parte Garland was decided in 1866 “The power of pardon conferred by the Constitution upon the President is unlimited except in cases of impeachment. It extends to every offence known to the law, and may be exercised at any time after its commission, either before legal proceedings are taken or during their pendency, or after conviction and judgment.” Nobody is going to waste their time investigating crimes that ca…
This issue reveals the gap between the prediction market premise and what these things actually are, which is: unregulated prop gambling venues. If things like Kalshi and Polymarket are prediction markets, then, at least as far as the intrinsic concerns of the market itself are concerned, insider trading is a good thing; literally part of the point. If they are instead how they function today, then insider trading is…
Even if you buy the idea that Kalshi is a prediction market whose mechanism is gambling but whose product is accurate predictions, you don't have to buy the idea that insider trading is a good thing. Yes, in the rare occasion there exists someone with (a) insider information (b) confidence their actions won't impact their insider position and (c) access to capital - then you get extremely accurate predictions. In eve…
Yes, and furthermore even if you’re one of those people who think insider trading in prediction markets is a good thing [1] that doesn’t somehow make it not illegal. The DoJ seems to be pursuing the theory that it constitutes wire fraud, which since “everything is wire fraud”, seems possible.[2] The CFTC has also claimed jurisdiction, which isn’t surprising since it claims jurisdiction over pretty much everything. If true this would mean some of the commodities trading regulations could be used as well, although insider trading rules in the US around commodities are generally less stringent than say for equities. In Europe I’m pretty confident that the EU market abuse regulations would cover insider trading in prediction markets, and make insider trading market abuse as it would constitute trading on material non-public price sensitive information. (European insider trading rules are stricter than the US in general).
[1] the standard argument in favour of this is not one I agree with, but people say that the benefit is that the inside information is revealed by people acting on it in the market and that this therefore benefits the non-insiders. How much you buy into this idea depends on how much you feel that non-insiders benefit from paying insiders for this more accurate price.
[2] https://www.freshfields.com/en/our-thinking/blogs/a-fresh-ta...
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If people with more information profit at the expense of people with less information, isn't that exactly how things are supposed to work? If you're approaching a market with hard facts, detailed comparisons and solid evidence; while I'm trading in the same market based on vibes and intuition, surely it's expected that your returns would be better, and mine worse?
Short answer, no. If you're betting on an outcome that can be controlled by an individual or small group, the incentive is for them to game the system by doing the OPPOSITE of what the prediction is so as to make the most money. "When a measure becomes a target, it ceases to be a good measure" https://en.wikipedia.org/wiki/Goodhart%27s_law
To illustrate with an example, your point is like saying that if we had a prediction market for "Will the United States cede Texas to Mexico in 2026?", then the US government would give up Texas just to get that sweet sweet prediction market payoff.
I would agree with a smaller point, that an org would accept minor tweaks it doesn't care about in order to game a market, but this just means it can tolerate being unpredictable about lower-order bits of its decisions. You see that in cases like Trevor Noah making a minor change to a speech to influence a particular bet.
This issue reveals the gap between the prediction market premise and what these things actually are, which is: unregulated prop gambling venues. If things like Kalshi and Polymarket are prediction markets, then, at least as far as the intrinsic concerns of the market itself are concerned, insider trading is a good thing; literally part of the point. If they are instead how they function today, then insider trading is…
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It’s not a libertarian argument for prediction markets that they should have insider trading, it’s the point of the exercise. The way they work is to incentivize people with knowledge to externalize the knowledge to the market. The concept of fairness doesn’t even make sense in that context. So if a market is trying to maintain a veneer of fairness it’s just using a prediction market as cover and is something else.
So the difference between a theoretically pure prediction market and Kalshi is ... this interview? The CEO saying that he thinks others, who do not answer to him in any way, will be doing something to enforce some notion of fairness. If you're being that puritan about the definition, then having a "real" prediction market is completely impossible. Because actors like the DOJ do not wait for a statement by the Kalshi…
The reason they do these things is that their first priority is to keep the gamblers happy, and the gamblers hate to think they got cheated.
This just gestures at the meta-problem with prediction markets, who pays for the alpha? With stocks, companies generate returns to capital. With commodities, there are buyers and sellers of the underlying. But there is very little economic usefulness about most prediction markets, especially by volume. The only way to get enough users to justify the effort to figure out accurate prices, is to turn it into an entertainment product. And in an entertainment product, if the customer doesn't like X, then you crack down on X.