Prediction markets are regarded as experimental tools to improve forecasting accuracy, but they still face structural issues. In 2008, scholars such as Arrow, Milgrom, Schelling, Shiller, and Vernon Smith claimed in Science that they are powerful research tools and advocated for deregulation. Currently, there is a lack of clear institutional boundaries; if regulation is unclear, their function may shift from information discovery tools to gambling-like products. The future direction depends on balancing the definition of informational tools and gambling characteristics.

MeNews

2026-05-23 00:32:52

Abstract generation in progress

ME News message. On May 15 (UTC+8), Bloomberg reported that prediction markets, as a market-based forecasting tool, have long been viewed as an experimental financial instrument that could improve forecasting accuracy, but their development still faces key structural issues. The article reviews that as early as 2008, 22 economists, including Kenneth Arrow, Paul Milgrom, Thomas Schelling, Robert Shiller, and Vernon Smith, published a statement in the journal Science, arguing that prediction markets are a “powerful research tool” and calling for reducing unnecessary regulatory restrictions. These scholars believed at the time that a prediction mechanism based on market price formation could, in some scenarios, be more accurate than traditional expert forecasts or statistical models. However, Authers pointed out that today’s prediction markets still lack clear institutional boundaries, and if the regulatory framework is not clearly defined, their function could gradually shift from an “information discovery tool” to a “gambling product.” Prediction markets are still in an “unformed experimental stage,” and their future direction will depend on how regulators define the boundary between their information-tool attributes and their gambling attributes. (Source: BlockBeats)

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PaperfoldDao

· 5h ago

If Schelling were alive, he would probably have to rewrite that paper.

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GaslightPoet

· 5h ago

There are quite a few Web3 projects involved in prediction markets, but compliance is basically running naked.

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ThereAreCatsInTheContract.

· 5h ago

Is Vernon Smith's experimental economics framework still applicable to on-chain markets?

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GateUser-4eae4cef

· 5h ago

Academic ideals often clash with practical interests, with the latter usually prevailing.

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YieldNotYell

· 6h ago

Instead of arguing whether it's gambling or not, why not build a sandbox and give it a try?

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MoonlightMineralWater

· 6h ago

Information value vs. speculative pleasure, users can't tell the difference at all

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BlocktimeBarista

· 6h ago

High prediction accuracy does not mean high social value; these two should be evaluated separately.

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ReflectiveChainShadow

· 6h ago

The longer the regulatory vacuum period, the easier it is for the market to be manipulated.

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SandwichAlertAgent

· 6h ago

From research tools to gambling products, this downward risk has been underestimated

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FeeTaker

· 6h ago

If structural issues are not addressed, even the most accurate predictions are useless

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Bloomberg: Prediction markets still have the potential to become more useful, but blurred boundaries could turn them into gambling tools

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