The Market That Wants Your House to Burn Down
Prediction markets on wildfires create a perverse incentive: traders can profit from disasters they might influence. Unlike ‘truth machines’ that aggregate information, these markets alter reality when the event is human-influenceable. Senators are demanding a crackdown, but the real danger is a structural class of traders with a financial interest in catastrophe. The Ankh-Morpork fire brigade analogy is eerily apt: paying by the fire leads to more fires. This isn’t about arson—it’s about systemic moral hazard.