The Fantasy of Winning on Prediction Markets The recent paper by researchers from Yale University and London Business School has shed light on a disturbing trend in prediction markets: a small minority of skilled traders consistently earn profits, while the rest of the users fund their victories through mistakes.
This trend is particularly concerning as these markets prepare to expand into Canada. Prediction markets seem appealing because they don't have a house edge, unlike traditional casinos.
However, this misconception leads many to underestimate the complexity and risks involved. As Roberto Gómez Cram, co author of the paper, notes, "You need to be sophisticated" to succeed in these markets.