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Vasily Kuznetsov's avatar

Thank you for the quick reply!If I follow the arguments from the paper right, the accuracy would only increase if the market doesn't limit participation and size of trades too much. The accuracy would increase as long as the additional volume of trading attracted by manipulation outweighs the manipulation itself.However, as the market volume grows, it becomes possible to benefit from insider trading. Such market could be then used to finance the activities that result in unlikely outcomes by betting on them. Does this make sense?

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RobinHanson's avatar

Manipulation makes prices MORE accurate, even in small thin markets: http://www.overcomingbias.c...

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