Prediction markets can be directly subsidized with a market maker, allowing all traders who provide info to improve the price to expect to profit. Also, the more fools the more informed traders should be attracted to profit from them, so the mix is endogenous.
Chris F. Masse April 23rd, 2008
Robin Hanson in a comment, over there.
See also that question for Mike “Barbecue” Giberson.
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