WP08
Prediction Markets as Arrow–Debreu Securities: Evidence from Polymarket
State Prices, No-Arbitrage Bounds and Macroeconomic News in Blockchain-Based Contingent Claims
Negative-risk events on Polymarket list one binary contract for every outcome of a decision and settle exactly one of them at one dollar, so that their prices are observable analogues of Arrow–Debreu state prices. The paper uses the five-outcome market on the June 2026 FOMC decision (146 daily closes, December 2025 to…