> I have heard grim accusations of pharmaceutical companies or health insurers who have an incentive to keep people sick. It's one thing to profit from the eventuality, it's another to cause the eventuality that leads to profit. I have assumed that many of the anti prediction market arguments are the latter.
> 
>

I'd argue that financial incentives within the medical industry *do* influence decision making towards hte more profitable outcomes.

It's not quite as far as saying they cause the medical problems, but it is going as far as to say their treatment decisions are influenced by the financial incentives, and that some of those treatment decisions may lead to worse outcomes for the patients.

>  it's another to cause the eventuality that leads to profit

I totally agree, but this isn't entirely the fault of prediction markets. Acts that should be criminal, starting wars for instance, are immune from justice.

> one bats an eye or suggests they shouldn't be compensated. 

I have heard grim accusations of pharmaceutical companies or health insurers who have an incentive to keep people sick. It's one thing to profit from the eventuality, it's another to cause the eventuality that leads to profit. I have assumed that many of the anti prediction market arguments are the latter. 

The article raises the concern that prediction markets will incentivize the leaking of state secrets -- I don't find this compelling. If the state can't prevent its employees from participating in markets with insider knowledge, how can they prevent them from accepting bribes? 

But I am more interested in the idea that prediction markets can give people an incentive to influence the outcome. This is true, I think. I may even be fine with it as a new force in society.

Scoresby

Is this true? Also, why shouldn't it be up to the employer to deal with an employee who indirectly leaks secret info in order to make money on a prediction market?

I guess one answer is that there is an asymmetry here: employers can't pay all employees as much as their inside knowledge might be worth on a prediction market.

Maybe they will have to. Ultimately, there's no putting the toothpaste back in the tube, so incentives will have to be realigned.

A lot of this is irrational squeamish pearl clutching. Trauma surgeons and hospitals profit off violence and no one bats an eye or suggests they shouldn't be compensated. Providing advanced warning that someone's home is about to be blown up can save their life just as much as a doctor patching them up afterwards.

Politics_And_Law

econ

On War Markets - probaaron

> Is this true? Also, why shouldn't it be up to the employer to deal with an employee who indirectly leaks secret info in order to make money on a prediction market?

It should.

> I guess one answer is that there is an asymmetry here: employers can't pay all employees as much as their inside knowledge might be worth on a prediction market.

Maybe they will have to. Ultimately, there's no putting the toothpaste back in the tube, so incentives will have to be realigned. 

A lot of this is irrational squeamish pearl clutching. Trauma surgeons and hospitals profit off violence and no one bats an eye or suggests they shouldn't be compensated. Providing advanced warning that someone's home is about to be blown up can save their life just as much as a doctor patching them up afterwards.