alt Hacker NewsHere's an alleged secondary effect of 2 in a quote by Polymarket founder Shayne Coplan[1]:
“When I get hit up by people in the Middle East who are saying, ‘Hey, we’re looking at Polymarket to decide whether we sleep near the bomb shelter; we look at it every day’ and I’m like, ‘Oh, it’s really that popular over there?’” he added. “That’s very powerful. That’s an undeniable value proposition that did not exist before.”
I'm with Matt Levine here[2]:
"There is something particularly dystopian about the idea that:
a) Some countries will bomb other countries.
b) The people doing the bombing will profit from the bombing by insider trading the bombing contracts on prediction markets.
c) This will cause the prediction markets to correctly reflect the probability of bombing, allowing the people getting bombed to avoid being bombed."
[1] https://www.bloomberg.com/news/articles/2026-03-07/polymarke... [2] https://www.bloomberg.com/opinion/newsletters/2026-03-12/lev...
I think the other side of the argument goes that (a) the bombings would happen anyway, and (b) bombing is very expensive so nobody actually profits from the insider trading. (The bombs "only" get marginally cheaper.) Thus the only actual effect is the early warning, which is a good thing in this case.
Like if someone managed to figure out a way to make slightly cheaper bombs but with the tradeoff that the cheaper bombs gave a few hours of eary warning to the people being bombed, I think I would prefer you used those bombs.
(There are many other cases where insiders may change the outcome to align with their bet. That is bad if the outcome is bad.)