Key points

Prediction markets coordinate our beliefs by turning individual bets into public forecasts.

A moral paradox exists: unethical insider trading can paradoxically improve a market's accuracy.

These markets create a psychological conflict between our desire for fairness and our craving for truth.

During the last U.K. election, a few politicians were accused of betting on when the vote would be called. At first glance, it looked like a familiar story of a small corruption scandal, insiders gaming the system they helped shape for personal gain.

More recently, the odds for the 2025 Nobel Peace Prize shifted dramatically on a popular prediction market just hours before the winner was announced. This was a change that raised eyebrows about the small group of people who guard that de

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