Finance Theory Group(@FinanceTheory):David Dai, @RuizheJia, and @ShihaoY develop a model of linked spot and prediction markets. Manipulation survives in equilibrium, making spot prices less informative but surprisingly increasing spot liquidity because manipulative BTC trades reduce adverse selection

2026.07.31 11:31

David Dai, @RuizheJia, and @ShihaoY develop a model of linked spot and prediction markets. Manipulation survives in equilibrium, making spot prices less informative but surprisingly increasing spot liquidity because manipulative BTC trades reduce adverse selection