Title: Price Discovery and Trading in Modern Prediction Markets

Speaker: Dexin Zhou, Associate Professor, City University of New York

Time: 10:00-11:30, June 18, 2026 (Thursday)

Venue: Room 713, Mingde Business Building (Zhongguancun Campus)

Language: English/Chinese

ABSTRACT:

This study provides the first evidence on price discovery dynamics across modern prediction markets. We study a unique dataset of common contracts traded on leading prediction markets, Polymarket, Kalshi, PredictIt, and Robinhood, during the period leading up to the 2024 U.S. presidential election. We find that more liquid prediction markets substantially outperform polls in predicting subsequent election results, yet there are significant price disparities across platforms. Polymarket leads Kalshi in price discovery, particularly when liquidity and trading activity are high, implying economically meaningful arbitrage opportunities. Moreover, net order imbalance from large trades strongly predicts subsequent returns, and the market experiencing greater directional order flow from large trades tends to lead price discovery. These results underscore how platform structure, liquidity, and informed trading interact to shape trading and prices.

SHORT BIOGRAPHY:

Dexin Zhou is an Associate Professor of Economics and Finance at Baruch College, City University of New York. His work examines the roles of media, social networks, and institutional investors in financial markets. His research has been published in top finance and accounting journals, including the Journal of Financial Economics, the Review of Financial Studies, and the Accounting Review, and mentioned by the Wall Street Journal, The Economist, and the Financial Times. He obtained a Ph.D. from Emory University and a BA from Bard College.