Efficient, liquid markets only form when there is enough public information on the underlying. It is less likely that a market would form around the unemployment or incarceration prospects of a little know individual as opposed to a celebrity. Prediction markets won't really affect the average joe, but they could effect celebrities.
You're talking about anonymously. Bitshares users are not anonymous. Anyone on this forum or involved with Bitshares to the degree we are, are all known. We all probably have files in some government database if you want to be paranoid about it.
I think when it's involving celebrities, you're talking about the most powerful people on earth, with plenty of money? And when it's assassination then it's like declaring war. I don't think it would be something which will be very popularly because if you think about it the people who have the most money in society can afford the body guards, they know the politicians or maybe even the President, and there isn't any privacy anymore.
On the other hand on the small scale, such as a boss using prediction markets against his employees, that kind of situation is what I would expect. Mainly because while there might be the court case in the United States showing it not to be legally wise, in another country where there hasn't been any court ruling the situation is different, the risk profile is different, and unlike assassination which is universally off limits, there are cultural differences which would make certain kinds of prediction markets more likely.
Additionally, I think that assassination markets are actually more likely than the other examples you provided. Betting on the death of celebrities is a far more common thing than you would assume. Assassination markets could pose a really big problem in the future if permissionless blockchains take off. On Bitshares, delegates still need to approve of the creation of a given market.
Then perhaps we should discuss now what the approval process should be, otherwise these prediction markets could be used to destroy Bitshares. I know with Augur there are some questions which can be really bad and there are ways to reject the question as invalid.
I don't think that the market would be established as you have framed it. A better market would be for the probability that some well known figure is not simply indicted but rather found guilty and sentenced to prison time.
Either way you could create prediction markets around that, and it could easily become something terrible.
In your example if a law enforcement officer were to arrest a well known figure without cause, people would know that there was a market and incentive for that officer to unjustly arrest the person and that officer would have to face whatever the associated consequences were.
They could come up with a cause prior to arrest. Tax evasion for instance or perhaps some obscure law was broken. The point is that it can be turned against us in the long term.
I'm not saying that benefits could not outweigh the costs, I'm just saying that there are deterrents for officers to unjustly arrest people even given an arrest market.
What deterrents? Do you really think if police really wanted to arrest and convict someone that it couldn't be arranged to happen?
Also most participants would enter into markets that could not easily be gamed, which is why I suggested that the market would probably pertain to conviction and not indictment.
And you think convictions can't be gamed?
https://en.wikipedia.org/wiki/Kids_for_cash_scandalI don't think Bitshares will be agnostic, at least not with the current delegates. Bitshares will represent the userbase. If the userbase gets really big, as in millions of people, then perhaps at that point the prediction market could be turned against us, which is why it's important to consider ethical implications.
The people currently involved with Bitshares are ethically oriented, and as long as Bitshares has self governing mechanisms it can possibly avoid most of the negative side effects and achieve the positive benefits. A complete hands off approach on the other hand, or an amoral approach, might not work out so well in the long term.
Bitshares has to in my opinion attract the most ethical people to make up it's userbase, the most responsible people, people who aren't reckless. Not every platform is going to operate on a set of principles to care to even weigh the positives and negatives. Some platforms will be completely anonymous (or at least the users will believe they are), and those platforms are where you'll likely see the unpredictable consequences.