We find that past FX prices correlate strongly with observed outcome frequencies. So, for example, among all securities priced around 0.2, roughly one in five actually do come true. We find that prices of movie stocks are good predictors of actual box office performance, and that prices of award securities serve as accurate likelihood assessments of eventual winners. HSX forecast accuracy is comparable to or better than human expert accuracy. Efficiency Arbitrage opportunities on HSX tend to disappear over time, as they do in real-money markets.
Applications Existing market games can serve as reasonably reliable sources of forecast information.
New market games can be established in areas of particular concern or interest as a means to collect pertinent information. Economists may consider game markets as an alternative platform for experiments in arenas where real markets do not exist. Advantages Game markets are easier and cheaper to set up than real markets, with few regulatory or legal impediments. Markets on the Web benefit from worldwide audience potential. We quantify the degree of arbitrage available on HSX, and compare with a real-money market of a similar nature.