More on Prediction Market Manipulation

Michael Giberson

I cross-postedDeep-Pocketed Manipulators are a Prediction Market’s Friend” at prediction market group blog Midas Oracle, where it generated a counter post from Stanford prof. Eric Zitzewitz, “Is Manipulation Good for a Prediction Market? Accuracy Isn’t Everything.” I replied with “What should be Done about Manipulation of Prediction Markets?

Also of note, a candidate for U.S. Congress in the Massachusetts fifth district special election urges visitors to his website to “Show Your Support. Buy shares of James Miceli for Congress at” (Inkling is a play-money prediction market.)

Advocating people buy shares in order to move the price is, in effect, encouraging “market manipulation” in the dry, technical sense of that term. If you follow the link to the Inkling market you will see that at least as of this morning the candidates encouragements have not succeeded. (See this post on Midas Oracle and this response.)