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How Well Do Prediction Markets Predict?
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How Well Do Prediction Markets Predict?
Prediction markets are exploding across the country, doing $24 billion in trades each month. Almost $2 billion of that was on contracts predicting who would win the midterm elections alone. Now, many members of Congress and state officials want to regulate these markets like casinos. Except that, unlike casinos, prediction markets serve a valuable information role in a free-market economy by helping hedge against risks. The classic example is …
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