Why market prices are not the same as certainty: reading outcome probabilities in prediction markets
Common misconception: when a prediction market says an outcome is trading at 70 cents, many traders treat that as a 70% “fact.” That is convenient but incomplete. Prices in markets like Polymarket (binary shares priced between $0 and $1) encode a mixture of information, incentives, liquidity effects, and institutional design choices. The number is best …
