Special Interest Group on Prediction Markets is online

A special interest group has been established as a resource for researchers and practitioners who are interested in the field of prediction markets. Being part of Forecasting Principles, this SIG aims at presenting research findings that support evidence-based principles.

In particular, the site covers ongoing research that provides guidelines, prescriptions, rules, conditions, action statements, or advice about what to do in given situations.

Aggregating private information from individuals, prediction markets are a judgmental forecasting method. Participants reveal private information by trading contracts whose pay-off is tied to the outcomes of future events. The market automatically aggregates the dispersed bits of information and produces dynamic forecasts.

For example, a contract on the outcome of an election pays $100 only if candidate X wins the election, and $0 otherwise. Assuming a current price of this contract of $45, the market forecasts a probability of 45% that candidate X will win the election.

The current site is a beta-version. To further develop the content, we ask for your contributions. The material for this special interest group is maintained by Andreas Graefe. Please contact him for further information, and with corrections, additions, or suggestions for these pages.

Source: Prediction Markets Special Interest Group