Prediction‑market feedback problem

Treating prediction‑market prices as inputs to public forecasting models can create feedback loops: a prominent forecast influences market prices, which then get re‑ingested into the same or other forecasts, eroding independence and complicating statistical inference. High correlation between market signals and model outputs also makes it hard to estimate which source adds predictive value and risks overfitting to moving targets. — If forecasters, journalists, and platforms start blending market prices into models without guarding against recursivity, public forecasts could become self‑reinforcing and distort political information flows.