Preprint
Sep 2026
Prediction-Market Seed Capital Recovery from Noise-Dominant Flow
Automated prediction markets require sponsors to prefund liquidity before observing order flow, creating a financing challenge at launch. We study whether nonnegative charges conditioned on observable payoff direction can improve recovery of this prefunded capital while limiting their effect on informed participation....
Yankai Chen, Bowei He, Zhuohan Xie et al.
· 1 citation