Harald, a loyal MR reader, writes to me:
What would happen if some famous rich person walked into a presidential prediction market and said: "Hello, I’m selling shorts for candidate A, to the value of a hundred million dollars if he should win. I’m not doing this because I don’t believe candidate A will win, indeed, I want her to win. I hope everyone who can help candidate A win, by campaigning, talking to friends, or even just voting, will buy a short from me (I’m practically giving them away!) and go out and do it with a healthy economic self-interest in their hearts!"
Regulators aside, could such a scheme work? It is best done as a contingent claims market, rather than in the InTrade format. You buy insurance for a penny, and you get a payout of a thousand dollars if candidate X wins. Claim holders may then support and talk up candidate X. Of course people who won’t change their votes for a thousand dollars also will try to buy up the contingent claims. So the sponsor might restrict purchases to people who live in swing states or who can prove independent voting affiliation or an absence of previous campaign donations [TC: I've edited this section a bit for clarity].
How about giving away assets that pay off if some important social problem is solved? How much would it cost to mobilize a strong enough army of voters to oppose farm subsidies?