Part 9/10:
Engaging in prediction markets involves several caveats. Firstly, the markets currently have limited scope, requiring additional testing to confirm their reliability in probability estimation. Additionally, participation is mostly a zero-sum game, where profits are made only if one outperforms others, typically resulting in aggregate losses for the majority.
Moreover, prediction markets are not immune to manipulation. A powerful participant could skew outcomes by injecting funds to inflate predictions according to their preferences. Finally, the presence of financial hedging can disrupt the convergence of accurate probabilities, leading to erroneous outcomes over time.