Prediction markets
By: Justin Wolfers, Eric Zitzewitz.
Contributors: Zitzewitz, Eric.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10504; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10504.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Business forecasting.; Economic forecasting.
Description: "We analyze the extent to which simple markets can be used to aggregate disperse information into efficient forecasts of uncertain future events.  Drawing together data from a range of prediction contexts, we show that market-generated forecasts are typically fairly accurate, and that they outperform most moderately sophisticated benchmarks.  Carefully designed contracts can yield insight into the market's expectations about probabilities, means and medians, and also uncertainty about these parameters.  Moreover, conditional markets can effectively reveal the market's beliefs about regression coefficients, although we still have the usual problem of disentangling correlation from causation.  We discuss a number of market design issues and highlight domains in which prediction markets are most likely to be useful"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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