Prediction Markets in Theory and Practice / Justin Wolfers, Eric Zitzewitz.

Format:

Book

Author/Creator:

Wolfers, Justin.

Contributor:

National Bureau of Economic Research.

Zitzewitz, Eric.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12083.

NBER working paper series no. w12083

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

Prediction Markets, sometimes referred to as "information markets," "idea futures" or "event futures", are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market-aggregated forecasts. This article summarizes the recent literature on prediction markets, highlighting both theoretical contributions that emphasize the possibility that these markets efficiently aggregate disperse information, and the lessons from empirical applications which show that market-generated forecasts typically outperform most moderately sophisticated benchmarks. Along the way, we highlight areas ripe for future research.

Notes:

Print version record

March 2006.