How To Rig a Disputed Election's Prediction Markets for $10 Million or Less
I wrote an article (since featured in Bloomberg's Money Stuff) about something I haven't seen discussed in-depth anywhere else: the risk that prediction market resolutions could be bought/rigged as a means of influencing public opinion and legitimizing the claim to have won a disputed election.
People have alluded to the pitfalls with prediction market resolutions in the abstract, but never in the specific context of a disputed election, which is unique in terms of how it's: hugely consequential (so the incentives to manipulate the market are far greater than merely the volume of the market itself), reflexively linked to the market's resolution (that is to say, the resolution of the market itself feeds back into reality in such a way that can actually cause that specific outcome to occur), and likely to be ambiguous.
To be clear: I am NOT talking about the scenario in which you manipulate the price in the run up to the election in order to make victory seem all-but-assured (i.e. 99% in favor of a particular outcome), but instead a scenario in which the election occurs, a particular candidate that lost claims to have won, and the markets themselves ultimately settle in favor of the candidate that objectively lost, which that candidate then cites as evidence in favor of the claim that they won.