Brattle Economists Discuss the Economic Challenges of Detecting and Deterring Manipulation in Event Contracts in New Law360 Article
Published in Law360
Principals Dr. Shaun Ledgerwood and Dr. Yingzhen Li and Senior Associate Dr. Alexei Orlov recently coauthored an article published in Law360 on the economic challenges of detecting and deterring manipulation in event contracts.
Concerns about possible manipulation and insider trading in event contracts have increasingly been raised by market observers, raising questions of how economics can inform regulation and litigation in this space. In their article, the authors distinguish hedging from speculation in event contracts, discuss how the latter can incentivize market manipulation, and highlight issues in surveillance and detectability of manipulation in prediction markets. This suggests how economics could prove useful in determining whether a specific event contract falls within the definition of a CFTC-regulated swap.
The full article, “The Challenges of Detecting Event Contract Manipulation,” can be found below.
