Examining Parlays in Prediction Markets
probabilityIt’s been a while since I last wrote on this blog. 😅
I’d like to share a quick post on something I’ve been noticing on prediction markets like Polymarket regarding parlay contracts.
Overview of Prediction Markets For those who don’t know, here’s a quick primer on how prediction markets work:
A Prediction Market is an “Information Market” A prediction market, similar to an option market, is a platform where participants can buy and sell contracts that pay out based on the outcome of future events. Rather than paying out based on the price of an underlying asset, like a stock option, these contracts pay out based on a specific events, such as the outcome of an election or a sports game. Ignoring the financial incentives, prediction markets can be seen as a way to aggregate information from a diverse group of participants to make predictions about future events.
Read more...