# Speculations Concerning the First Free-ish Prediction Market

Suppose [Kalshi](https://kalshi.com/) launches their cool new prediction marketplace soon, and it attracts a large userbase with high trading volume, *and* it doesn’t get shut down or strangled with red tape. What then?

Speculations
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*   [Replication markets](https://www.replicationmarkets.com/) will mitigate some of the bias afflicting scientific research.
*   Market prices will become an additional source of bias afflicting scientific research.
*   There will be sets of questions that can sketch out causal models. The market will give predictions not only on what will happen but *why*.
*   Philanthropists will subsidize markets of public interest unless and until governments do.
*   There will be great demand for trustworthy reports of ground truths. Some kind of payment scheme will be worked out that pays fees to trustworthy reporters. Costly signals of honesty will be developed and popularized.
    *   "A survey of 100K residents showed \[some result\]. Survey integrity was established by \[some standardized proof of neutrality or costly signal of honesty\]".
*   There will be market estimates on how long we have until the next respiratory pandemic, the next natural disaster, the next large military conflict, and so on.
*   The userbase will contain some amount of institutional investment even though individual bets are capped at $25K. There will be professional traders whose daily workflow is similar to that of existing professional stock traders.
*   Futurism will be more disciplined. Conversations about technological forecasting will always involve some discussion of contract prices. "Majority self-driving traffic within the next 20 years, huh? Well the markets have that at X cents."
*   The $25K cap will sometimes be low enough for price manipulation by special interests, so makers of important policy will be hesitant to use decision markets.

Questions
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*   How reasonable is the initial assumption--that Kalshi does not shut down or get hamstrung with red tape?
*   How much extra complication will there be in betting about inflation? Betting on the value of the very currency with which you are betting seems possibly kinda tricky.
*   Direct questions about assassinations will be banned of course. But how hard will it be to arrange bets across multiple innocent markets in order to *indirectly* bet on banned markets? Are there other ways that perverse incentives can leak into otherwise regular usage?
*   How much will insurance bets cause market prices to diverge from notional market probabilities? If people bet on an imminent pandemic because they want to reduce their total potential pandemic losses, this will raise the price above the market’s probability.
*   What are the implications for a startup employee who is being partly paid in equity? Will it be easy or impossible for that employee to move their net position back to neutral by betting against the startup?

Pre-Hindsight Prompt
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> The year is 20XX and prediction markets are in full swing, with all kinds of new business models and betting opportunities now available, many of which you hadn’t even thought of before Kalshi launched. But not for lack of imagination--you realize that you really could have been the first mover on a few of these new enterprises back in 2021 if you had brainstormed a bit. Describe one of them.