Generalizability across prediction-market settings

Determine whether the screening, rent extraction, venue coexistence, and information-aggregation results derived for short-horizon binary prediction-market contracts survive in other prediction-market markets and contract types.

Background

The empirical calibration in the paper is based on one short-horizon contract type: Bitcoin five-minute up/down prediction markets. The theoretical mechanism is motivated by and compared with broader prediction-market evidence, but the paper does not establish that the empirical regularities or the model’s conclusions hold across markets with different horizons, asset categories, liquidity conditions, or outcome structures.

The authors explicitly leave this as an empirical question. Resolving it would test whether the observed maker profits at settlement, behavioral tail demand, screening rents, and coexistence patterns are general features of prediction markets or specific to the calibrated contract environment.

References

Four limitations mark an opening: (i) the mechanism rests on a single pre-shock quote, so a dynamic microfoundation in which makers requote as the volatility regime evolves is an important open question; (ii) AMM depth enters only through a scalar $L$, leaving concentrated, Uniswap-v3-style bucketed depth a natural next step; (iii) our results are positive throughout---we characterize which configurations survive, not which one a platform should choose; and (iv) the calibration rests on one short-horizon contract type, so whether the same results survive in other markets remains an empirical question.

— Who Aggregates Information? Screening, Rent, and the Coexistence of CLOB and AMM Prediction Markets  (2609.20017 - Zang et al., 17 Sep 2026) in Section Conclusion and Open Directions