Presenter: Pat Akey, ESSEC Business School

Title: Who Wins and Who Loses In Prediction Markets?

Abstract: We study trading gains and losses on Polymarket, the world’s largest prediction market platform, using a comprehensive dataset of more than 2.4 million users from 2022 to 2026, totaling over $67 billion in volume across 588 million trades. We document a striking profit concentration: the top 1% of users capture 76.5% of all trading gains. Gains flow almost entirely to sophisticated traders who outperformed market-implied probabilities. Long-shot betting drives loss concentration, while market-making strongly predicts positive performance. Our results suggest that the informational benefits of prediction markets come at a cost to unsophisticated participants.

Host: Santanu Kundu

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