Essentially the argument is that more dumb money in a prediction market provides an even stronger incentive for smart money to join, moving the price back to an accurate probability.
That also seems to assume that there’s enough smart money (and smart information) to balance things out. I’m not sure about that.
Essentially the argument is that more dumb money in a prediction market provides an even stronger incentive for smart money to join, moving the price back to an accurate probability.