Prediction‑market reflexivity in forecasting

When public forecasters incorporate live prediction‑market prices into models, they can create a two‑way loop: markets move on forecasts, and forecasts update on market moves. That reflexivity can amplify mistaken beliefs, magnify noise as signal, and make markets less a source of independent information and more a coordination mechanism. — If true, this dynamic changes how journalists, pollsters, and platforms should treat market prices as evidence and suggests a need for transparency standards or guardrails around using market data in widely published forecasts.