Prediction markets, polling, and insider trading

 My book about controversial markets has attracted some interest from people following prediction markets.  Here's another recent interview.

 

Nobel Winner Alvin Roth Sizes Up Prediction Markets: 'I Don't Know If They Do Better On Elections Than Polls'  by Daragh Thomas  

In an interview with Benzinga after the release of his new book Moral Economics, Stanford economist Alvin Roth said the strongest use-case for the technology may not be public platforms like Polymarket or Kalshi, but inside corporations. He described a scenario where engineers building a product know about delays that senior executives, working from optimistic reports, do not. A prediction market inside the company can get the information to the top faster. 

...

"He said election markets are unlikely to face serious insider-trading risk, but neither are they guaranteed to beat good polling. “I don’t know that prediction markets do a lot better on elections than good polls do,” he said.

"He flagged a different concern: manipulation. State actors or well-funded propaganda operations could push large sums into a market to engineer a favorable price."

...

"Securities markets exist in part to help companies raise capital, he said, which requires public trust. Prediction markets do not carry the same burden, so the harm from insider activity is less clear.

"He added that if real insider trading is happening off political news, the likelier venue is the commodities market. “The price of Brent Crude moves rapidly when the president says something,” Roth said." 

*********

Earlier: 

Tuesday, June 30, 2026  Sports Betting, Prediction Markets, and ‘Repugnant Transactions’--a conversation at Covers.com

 

Coffee (and) science: medicine and climate change

 First the good medical news for coffee drinkers, from MedpageToday and the journal Clinical Gastroenterology and Hepatology:

Coffee Lovers and Their Livers Can Celebrate, Study Suggests — Five or more cups a day linked to the greatest benefit  by Mike Bassett, Staff Writer, MedPage Today 

"Coffee consumption has been linked to a number of health benefits, such as reduced risks of dementia, head and neck cancer, and all-cause and cardiovascular mortality.
According to data from the U.K. Biobank, a higher intake of coffee was associated with lower risks of cirrhosis, hepatocellular carcinoma, and liver-related mortality.
These associations persisted for both caffeinated and decaffeinated coffee, and for unsweetened and sweetened coffee."

 

Here's the journal article: Kim H, Rezaee-Zavareh M, Wang Y ...
Coffee Consumption and Improved Liver Outcomes: Clinical, Imaging, and Proteomic Evidence From the UK Biobank, Clinical Gastroenterology and Hepatology, 2026;  

 

#######

 And here's more sobering news, published in Nature, about how climate change threatens coffee cultivation:

Coffee is under threat: how scientists are fighting to save it from extinction
Coffee plants are critically endangered by climate change. Researchers are finding solutions to keep scientists supplied with their favourite discovery fuel.   By Davide Castelvecchi 

"Nearly all the 10 million tonnes of coffee beans consumed annually around the world come from two plant species: the strong and often bitter robusta (Coffea canephora) and the more delicate-tasting arabica (Coffea arabica). Unfortunately, arabica suffers or dies when temperatures rise just a few degrees1, and robusta requires massive amounts of water and its yields drop drastically in a drought.

...

"Tesfaye says that scientists, of all people, should care about coffee’s future, not just because science is good for coffee, but because coffee is good for science, too. “Many discoveries and knowledge are generated after having a cup of coffee.” 

“Voluntary, Unpaid, and Handsomely Rewarded: Donor Benefits in the World's Whole-Blood Systems,” by Krawiec and Roth

 Around the world, "non-compensation" of blood donors allows for a variety of incentives.

Kimberly D. Krawiec and Alvin E. Roth, “Voluntary, Unpaid, and Handsomely Rewarded: Donor Benefits in the World's Whole-Blood Systems,” SSRN, Virginia Law and Economics Research Paper No. 2026-12,  1 July 2026, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7030818  

 Abstract
The ideal of the unpaid blood donor is nearly universal; the practice is more complicated. Whole-blood systems around the world preserve a formal commitment to voluntary, nonremunerated donation-and then provide donors with gift cards, sweepstakes entries, cash "expense allowances," paid leave, tax relief, priority service, medals, and, in some places, extra points on a child's school exam. This Essay maps the gap between label and practice. Drawing on examples from thirteen countries spanning five continents, it organizes donor benefits by institutional mechanism: gift cards and sweepstakes; direct monetary transfers; paid work leave; other material and recognition-based benefits; and replacement donation and the informal cash markets it can generate. We demonstrate that "voluntary, nonremunerated donation" frequently coexists with substantial material benefits. Whole-blood donors nearly always receive something of value in exchange for their generosity; what varies is how those benefits are structured, funded, routed, and legally classified. 

 

Jurisdiction	Representative donor benefits	Legal classification / routing
United States	Nontransferable gift cards; sweepstakes (e.g., Super Bowl LX trip; $5,000–$7,000 raffles); promotional items (shirts, mugs, bags, movie tickets).	“Volunteer donor” label retained where benefits are not readily convertible to cash; sweepstakes framed as “no donation necessary.”
South Korea	Promotional K-pop photo cards; vendor and restaurant vouchers (5,000–8,000 won); merchandise; transferable blood-donation card.	Prohibited “consideration” distinguished from “commemorative gifts” and donor encouragement.
Kazakhstan	~$18.75 (2 MCI) for reimbursable donation; ~$2.34 meal equivalent for gratuitous donation.	Categorized as payment; reimbursable donation invited for shortages and rare types.
Bulgaria	Payment in narrow statutory cases (shortage, vaccine/serum/immunoglobulin production, research/diagnostics).	Voluntary/unremunerated rule with “against payment” exceptions.
Germany	Direct monetary transfers at some collection centers; refreshments and health checks only at DRK.	“Aufwandsentschädigung” (expense allowance), set per collection service.
China	Family exam-point awards (Pujiang: 1–3 points); platelet shopping cards $31–$386; paid leave, tax benefits; prepaid phone/transport cards, movie tickets.	“Gratuitous” system plus “appropriate subsidies”; tolerated monetary-equivalent and family-directed rewards.
South Africa	Data/streaming vouchers, raffles, merchandise; private wellness rewards (Discovery Vitality, Momentum, Bonitas).	Donor benefits supplied through blood-service promotions and private wellness programs.
Brazil	One paid day off per 12 months (private employees); donation-day leave (public servants); 120-day priority service at banks, hospitals, etc.	Donation converted into paid-leave entitlement and legally recognized priority status.
Spain	Donor medals, honors, and milestone recognition.	Recognition-based; no direct monetary transfer.
India	Replacement donation; illicit “professional donor” cash market.	Patient-side payment associated with replacement donation.
Nigeria	Tokens, certificates, badges, transport refunds; in practice 68% family replacement and 12.2% commercial donors.	Patient-side payment associated with replacement donation; commercial donors openly reported in donor categories.
Sierra Leone	Predominantly family replacement donors (~90%); paid donors recorded as replacement donors.	Patient-side payment associated with replacement donation; paid donors recorded as family replacement donors.
Argentina	Post-donation meal; medical certificate; 24-hour work-absence justification; 2026 shift away from replacement model.	Statutory donor benefits plus replacement-donation phase-out.

 

"If there is a lesson in this tour of the world’s whole-blood systems, it is that “voluntary, nonremunerated donation” is a phrase asked to carry a great deal of freight. It accommodates a $7,000 gift card, so long as the gift card is offered through a sweepstakes that does not require a blood donation to enter. It accommodates €60 in cash, so long as the cash is legally categorized as an expense allowance. It accommodates extra points on a child’s high-school entrance exam, paid leave, free public transit, priority service at the bank, and a tote bag—often all while the governing statute insists that blood may not be given for reward. "

The Transactions We’re Not Allowed To Have, in conversation with Brian Keating on the Into The Impossible Podcast

  The Transactions We’re Not Allowed To Have, in conversation with Brian Keating on the Into The Impossible Podcast

 

 A Nobel laureate in economics argues the bans we pass to protect our morals are quietly killing people and the data backs him up. Why the line between a market we allow and one we forbid is mostly an accident of disgust. Subscribe if you want science with evidence, not speculation.

My guest won the 2012 Nobel Prize for designing the systems that match kidney donors to patients who would otherwise die waiting.

We cover why it’s easy to buy heroin but hard to hire a hitman, what surrogacy bans actually do to the babies they’re meant to protect, why paying kidney donors could end a shortage that kills thousands a year, and the trade-off statement he wants every lawmaker to say out loud.

He has been called an organ trafficker. He explains why that’s the point.

What you’ll hear:

Why banning something that people want often makes it more dangerous

The kidney market America won’t build and what that silence costs

What the hitman vs. heroin ban asymmetry tells us about effective prohibition

The McCormick statement: the trade-off acknowledgment most policy debates refuse to make

How prediction markets are eroding the boundary between public and private information

Whether Milton Friedman was right to be embarrassed by the economics Nobel

There’s no such thing as a solution. There are only trade-offs.

CHAPTERS

00:00  Who gets called an organ trafficker?

02:26  What makes a transaction repugnant?

03:14  Why bans without support create black markets

03:36  Heroin is easy. Hitmen are not. Why?

04:44  Prohibition, NASCAR, and moonshine

07:26  Surrogacy: legal here, criminal in Europe

12:30  When money turns something legal into a crime

14:28  Can religion corrupt a market?

15:56  Who actually pays for college?

21:38  The Enhanced Games: drugs as a marketing platform

25:30  Adderall, Erd0151s, and the science of getting sharper

30:58  Why AI makes market congestion worse before better

35:00  100,000 kidney failures a year. 30,000 transplants.

36:44  Portland decriminalized heroin. It failed.

39:22  The trade-off statement politicians refuse to make

41:14  Can you legalize sex work and shrink trafficking?

47:42  Kahneman chose to die. Who should decide?

48:30  Should we put GLP-1 drugs in the water?

56:12  America is the Saudi Arabia of blood plasma

01:00:54  Prediction markets and inside information

01:01:34  Sports gambling is more addictive than it looks

01:11:40  Peter Nobel called economics a marketing stunt

01:13:32  Is economics a real science?

Get the transcript, fascinating bonus content, and my Monday M.A.G.I.C. Message: https://briankeating.com/yt

Have a .edu email and live in the USA? You automatically win a meteorite: https://BrianKeating.com/edu

Subscribe: https://www.youtube.com/DrBrianKeating?sub_confirmation=1

 

Featured Guest:

Alvin Roth website: https://web.stanford.edu/~alroth/

Moral Economics (book): https://www.amazon.com/Moral-Economics-Prostitution-Controversial-Transactions/dp/1541702018
 

A roadmap for international kidney exchange in India

  India, which performs the third most kidney transplants in the world (after only the U.S. and China) is a natural location for international kidney exchange on a global scale.  Here's a brief outline of the legal, administrative and procedural obstacles that need to be overcome on the way.

Kashiv, Pranjal MD, DM1; Balwani, Manish Ramesh MD2; Kute, Vivek B.3. International Kidney Paired Donation: Implications for India and Other Low- and Middle-income Countries. Transplantation ():10.1097/TP.0000000000005807, June 26, 2026. | DOI: 10.1097/TP.0000000000005807  

Another NBA Player Charged With Rigging Games for Gamblers

 Bets on a particular player's performance open the door to sinister influences in sports.

The WSJ has the story:

Another NBA Player Charged With Rigging Games for Gamblers
According to a federal indictment, Malik Beasley was in debt to a former teammate when he agreed to help gamblers by manipulating his own performance. By Jared Diamond  and Robert O’Connell 

"The government’s indictment identifies four games during the 2023-24 season where it said Beasley agreed to participate in the scam. Beasley had allegedly accumulated millions of dollars in gambling losses and, at times, owed money to Davis, a retired forward who played with Beasley on the Minnesota Timberwolves during the 2020-21 campaign. In return for fixing his games, Beasley would have his bill to Davis reduced or eliminated, according to the indictment. 

"The charges against the 29-year-old Beasley are yet another example of a prominent NBA player swept up in illegal gambling activities—and the implications for the league are chilling. On Jan. 26, 2024, the day Jontay Porter removed himself from a Toronto Raptors game with a fake injury so his conspirators would win bets, there was another game on the take 500 miles away. (Porter has since pleaded guilty to federal charges and is awaiting sentencing.) 

...

"Once Beasley was on board, the next question was which games to target. The government says the gamblers specifically looked for non-marquee games—far from the NBA’s nationally televised showcases on ESPN and TNT—where Beasley could manipulate his performance.

“It’s better not to be on tv for us,” one defendant wrote in a group chat.

"There was also infighting among the group, with some bettors chasing big paydays while others settled for more modest wins. At one point, one defendant accused another of betting so much that he single-handedly altered the lines, which risked drawing suspicions from authorities. "

Sports Betting, Prediction Markets, and ‘Repugnant Transactions’--a conversation at Covers.com

 I was recently interviewed at the gambling hyper-site Covers.com about the growth of sports gambling both on dedicated sites and on prediction markets.

A Nobel Laureate Talks Sports Betting, Prediction Markets, and ‘Repugnant Transactions’ by Geoff Zochodne -  "Nobel Prize-winning economist Alvin E. Roth has published a new book that can help put the raging debates about sports betting into a very relatable context." 

"It’s not often, or ever, you see a Nobel Laureate writing about his ties to match-fixing. 

That is until you see Nobel Prize-winning economist Alvin E. Roth writing in his new book that he feels “a certain connection” to point-shaving. It's just for reasons that have less to do with economics or match-manipulation and more because of a shared name.

Another Alvin Roth, nicknamed "Fats," was banned from the NBA because of a college basketball point-shaving scandal that came to light in the early 1950s.

“He (Fats) was also sentenced to jail, but a judge permitted him to join the army instead,” Roth writes in his recently released book “Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work.”   

...

Roth spoke to Covers over the phone recently about his book and his framework for approaching “repugnant transactions,” which, yes, can include sports betting. 

“Remember that when I say something is repugnant, I don't mean that I don't like it or that you shouldn't like it,” Roth said. “I mean that some people don't like it, and I think that gambling falls squarely into that category. Lots of people like to gamble, and lots of people, other people, think they shouldn't be allowed to, so it's a repugnant transaction, and there have been laws of all sorts allowing or banning it. And we've gone back and forth with the United States on lotteries, and more recently on sports betting.”  

...

“I fear that online gambling will have much to teach us about addiction,” Roth writes.  

...

Again, gambling is not the focus of Roth’s work. Nor are prediction markets, which critics often describe as a new form of gambling. Yet Roth says one of the things he writes about is that it is hard to ban something in a given jurisdiction when it’s legally available and within reach in another jurisdiction.

“And, of course, the internet makes everybody a neighbor to everybody else,” Roth says. 

In other words, the fact that prediction markets have popped up offering de facto sports wagering in states that have yet to legalize sports betting is not some new phenomenon. It’s all in keeping with society’s ongoing tug-of-war with morally contested markets. You can ban, you can regulate, but somebody will probably be unhappy in the end with what you’ve done and may still seek out what you’ve forbidden or restricted.  

A dozen books enjoyed by venture capitalists (from a16z)

 Reading lists are interesting both for the books they describe, and for what they say about the list makers. Here are a dozen interesting-looking books from people at the venture capital firm Andreeason Horowitz (aka A16Z).

A reading list for the deeply curious
Part one of our summer reading list: 12 books on technology, markets, AI, code, and the systems behind change.   a16z crypto 

Four of the twelve recommended books come under the heading  How markets are designed.

These are those: 

Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work by Alvin E. Roth

“My doctoral advisor, Al Roth, has been thinking for decades about ‘repugnance’ – why some people prefer that some markets should not exist. In Moral Economics, he tackles the motivation for these prohibitions and the trade-offs they force, head-on. And he explores, in particular, how such non-market norms emerge and sometimes later collapse — limitations on alcohol and drugs, and, in a completely different category, same-sex marriage have all been relaxed in recent years — and what this means for making markets in the future.” – Scott Duke Kominers, research

Why Nations Fail by Daron Acemoglu and James A. Robinson

“Acemoglu and Robinson’s central thesis, that inclusive institutions drive prosperity while extractive ones cause stagnation, maps surprisingly well onto crypto. Decentralized protocols are essentially an attempt to hard-code inclusive institutions: open access, no gatekeepers, rules enforced by code rather than by whoever’s in power. The book is a great lens for understanding why certain blockchain ecosystems thrive while others are captured by insiders. A must-read for anyone thinking seriously about governance, whether at the nation-state or protocol level.” – Kira Song, finance

An Engine, Not a Camera: How Financial Models Shape Markets by Donald MacKenzie

“Sociologist Donald MacKenzie’s An Engine, Not a Camera is nominally a book about financial economics, but its real subject is more provocative: What happens when theories stop describing the world and start changing it? MacKenzie traces how academic models of markets escaped the university and became embedded in the markets themselves. First published in 2006, it remains relevant today in a number of contexts — not least because of the recent interest from TradFi in crypto. But I wanted to read it again because of the book I’m working on with colleague Robert Hackett, about how computer science theories acted on the world.” – Tim Sullivan, editorial

A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market by Edward O. Thorp

“Growing up, I was obsessed with the movie 21 and the idea that you could actually use math to beat the house. This book is the autobiography of the man who essentially started it all. Edward Thorp went on to apply those same principles to Wall Street, becoming the father of quantitative investing. It’s an incredible story about using pure logic to disrupt rigged legacy systems, which perfectly captures the same builder mindset we see in crypto today.” – Ben Wu, talent