Separate game progress from tick-grid effects on quoted spreads

Determine the respective contributions of game progress and the venue’s tick grid to narrower quoted spreads in Polymarket prediction markets.

Background

The paper analyzes venue-wide migration and tick-size changes using descriptive within-market and comparison designs. The tick changes generally occur when binary-market prices approach their extremes, often near resolution or after a sporting event has progressed, making tick adoption endogenous to the market lifecycle.

The World Cup tick change provides a separate comparison, but treated markets share only a small number of events and game progress affects treated and control markets. The paper consequently finds that narrower spreads are consistent with a binding grid without identifying whether the observed changes arise from the grid, game progress, or both.

References

Narrower spreads are consistent with a binding grid, while game progress and the grid's contribution remain unresolved.

— Measuring Trade Direction in a Prediction Market: Settlement Ground Truth and Trading-Cost Measurement on Polymarket  (2610.06412 - Dubach, 5 Oct 2026) in Section 1, Introduction; Appendix Section 11.7, “What can be claimed”