Prediction Markets: The Collective Knowledge of Market Participants

2009 ◽  
Vol 26 (2) ◽  
pp. 37-44 ◽  
Author(s):  
Justin Wolfers
Keyword(s):  
Prediction Markets ◽  
Collective Knowledge ◽  
Market Participants

IMPROVING FORECASTING ACCURACY IN CORPORATE PREDICTION MARKETS – A CASE STUDY IN THE AUSTRIAN MOBILE COMMUNICATION INDUSTRY

2012 ◽  
Vol 3 (3) ◽  
pp. 49-62
Author(s):  
Martin Waitz ◽  
Andreas Mild
Keyword(s):  
Predictive Ability ◽  
Market Mechanism ◽  
Prediction Markets ◽  
Data Sets ◽  
Success Rates ◽  
Prediction Market ◽  
Communication Industry ◽  
Market Participants ◽  
Market Shares ◽  
Continuous Double Auction

Corporate prediction markets forecast business issues like market shares, sales volumes or the success rates of new product developments. The improvement of its accuracy is a major topic in prediction market research. Mostly, such markets are using a continuous double auction market mechanism. We propose a method that aggregates the data provided by such a prediction market in a different way by only accounting for the most knowledgeable market participants. We demonstrate its predictive ability with a real world experiment.We want to thank Günter Fädler from pro:kons, an Austrian provider of prediction markets, for his support and providing us with the data sets used in this paper.

THE EFFECT OF STOCK ENDOWMENTS ON THE LIQUIDITY OF PREDICTION MARKETS

2012 ◽  
Vol 2 (3) ◽  
pp. 33-46
Author(s):  
Thomas Seemann ◽  
Harald Hungenberg ◽  
Albrecht Enders
Keyword(s):  
Prediction Accuracy ◽  
Prediction Markets ◽  
Online Game ◽  
World Cup ◽  
Fifa World Cup ◽  
Market Participants ◽  
Forecasting Method ◽  
Efficient Prediction ◽  
High Prediction ◽  
The Impact

Prediction markets are considered as a promising new forecasting method that has proven high prediction accuracy in many areas such as politics, sports, and business-related fields. The method is, however, far from being established or even understood. The specific circumstances and market designs that lead to efficient prediction markets need to be further identified. This paper tries to statistically analyze the impact of certain factors in market design. In particular, we analyze the impact of the initial endowments provided to new market participants on the liquidity of prediction markets. Market operators can provide either a cash endowment or a combination of a cash and stock endowment. By evaluating two play-money prediction markets run in parallel during the FIFA World Cup 2006, we show that the stock endowments significantly foster liquidity in the market. We recommend operators of online game markets as well as corporate prediction markets to provide stock and cash endowment to participants instead of pure cash endowments wherever feasible.

scholarly journals How to Tie Everyday Work to Strategy

2009 ◽  
Vol 08 (04) ◽  
pp. 287-300
Author(s):  
Mary Lee Kennedy ◽  
Malgorzata (Gosia) Stergios
Keyword(s):  
Library Services ◽  
Course Development ◽  
Prediction Markets ◽  
Collective Knowledge ◽  
Emerging Trends ◽  
Strategy Process ◽  
Everyday Work ◽  
School Research ◽  
Information Assets ◽  
The Guardian

The paper describes how Harvard Business School's Knowledge and Library Services (KLS) leveraged the collective knowledge of its employees in formulating, implementing, and evaluating strategy. The organisation was faced with major, disruptive changes in its environment and needed the diverse knowledge and full engagement of all employees to make a series of strategic shifts. The shifts included integrating KLS products and services with the Harvard Business School research and course development process, developing global scope in information resources and expertise, and trading its role as the guardian of books and buildings for the organiser of the School's priority information assets. In order to achieve that, KLS launched the Environmental Scan Program, relying on employees' insights aggregated through social tagging, trend analysis and internal prediction markets tracking emerging trends. KLS also created processes for the collective assessment of strategy and a faster way of turning ideas into new products and services. The paper concludes with an assessment of the approach, pointing to a difficult balance between emergent and collective dimensions of strategy process with its formal, structured facets.

THE HIDDEN BEAUTY OF THE QUADRATIC MARKET SCORING RULE: A UNIFORM LIQUIDITY MARKET MAKER, WITH VARIATIONS

2012 ◽  
Vol 1 (2) ◽  
pp. 111-125 ◽  
Author(s):  
Michael Abramovicz
Keyword(s):  
Scoring Rules ◽  
Prediction Markets ◽  
Market Maker ◽  
Scoring Rule ◽  
Market Makers ◽  
Market Participants ◽  
Aggregate Information ◽  
Spectrum Market

For some applications, prediction markets that rely entirely on voluntary transactions between individual participants may provide insufficient liquidity to aggregate information effectively, especially where the number of participants is small. A solution to this problem is to rely on an automated market maker, which allows participants to buy from or sell to the house. Robin Hanson has described a class of automated market makers called market scoring rules. This Article examines a member of this class that has received little attention, the quadratic market scoring rule. Its prime virtue is that it provides uniform liquidity across the probability or prediction spectrum. Market participants will thus have the same incentive to do research that is expected to produce an expected change in the market prediction, regardless of the current prediction. Formulas are provided for implementing the quadratic market scoring rule, as well as variations, for example to implement conditional markets.

scholarly journals PREDICTION MARKETS AND CONTRACT DESIGN

2012 ◽  
Vol 5 (2) ◽  
pp. 1-13
Author(s):  
Ole Jakob Bergfjord
Keyword(s):  
Futures Markets ◽  
Contract Design ◽  
Futures Contracts ◽  
Prediction Markets ◽  
Extensive Literature ◽  
Main Function ◽  
Good Information ◽  
Natural Assumption ◽  
Market Participants ◽  
Design Characteristics

 Traditionally, the main function of prediction markets (PMs) has been to provide information about probabilities for various events. Good information requires a well-functioning market, which in turn depends on sufficient liquidity and a sufficient number of market participants. While many of the early PMs have been of a more experimental nature, with students or other test groups as market participants, a natural assumption is that future PMs must be able to attract market participants to be successful.We assume that four main groups of stakeholders face potential gains from a well-functioning PM contract: The exchange launching the contract; hedgers; gamblers; and users of the market information, whether this is a corporation or society as a whole.In this paper, we analyze different design characteristics of PM contracts, mainly in light of previous studies of futures markets. A relatively extensive literature exists on the design of futures contracts, and a number of criteria have been established to predict whether a contract is likely to be successful. We use this to provide some recommendations for contract design, in order to develop contracts that maximize the gain for the four groups of stakeholders.

scholarly journals Using prediction markets to estimate the reproducibility of scientific research

2015 ◽  
Vol 112 (50) ◽  
pp. 15343-15347 ◽  
Author(s):  
Anna Dreber ◽  
Thomas Pfeiffer ◽  
Johan Almenberg ◽  
Siri Isaksson ◽  
Brad Wilson ◽  
...  
Keyword(s):  
Temporal Dynamics ◽  
Scientific Discovery ◽  
Low Cost ◽  
Prediction Markets ◽  
Significant Finding ◽  
Prior Probabilities ◽  
Market Participants ◽  
Promising Tool ◽  
Scientific Results ◽  
Set Up

Concerns about a lack of reproducibility of statistically significant results have recently been raised in many fields, and it has been argued that this lack comes at substantial economic costs. We here report the results from prediction markets set up to quantify the reproducibility of 44 studies published in prominent psychology journals and replicated in the Reproducibility Project: Psychology. The prediction markets predict the outcomes of the replications well and outperform a survey of market participants’ individual forecasts. This shows that prediction markets are a promising tool for assessing the reproducibility of published scientific results. The prediction markets also allow us to estimate probabilities for the hypotheses being true at different testing stages, which provides valuable information regarding the temporal dynamics of scientific discovery. We find that the hypotheses being tested in psychology typically have low prior probabilities of being true (median, 9%) and that a “statistically significant” finding needs to be confirmed in a well-powered replication to have a high probability of being true. We argue that prediction markets could be used to obtain speedy information about reproducibility at low cost and could potentially even be used to determine which studies to replicate to optimally allocate limited resources into replications.

Starting points for therapeutic change

2020 ◽  
Vol 16 (2) ◽  
pp. 117-128
Author(s):  
Claudio Scarvaglieri
Keyword(s):  
Societal Perspective ◽  
Therapeutic Change ◽  
Psychodynamic Therapy ◽  
Second Step ◽  
Change Processes ◽  
Collective Knowledge ◽  
Patient’S Experience ◽  
Client Centered Therapy ◽  
Therapy Sessions ◽  
Crucial Part

Based on a corpus of 70 tape-recorded therapy sessions (client-centered therapy, psychodynamic therapy), this paper presents analyses of therapists’ interventions that have the potential to trigger change processes. Using a conversation analytic approach, we identify utterances that re-formulate the patient’s experience from a different perspective. In a second step, we draw on concepts from cognitive and pragmatic linguistics, mainly “frame” and “category”, to analyze the conceptual side of these rewordings. We show that, besides processes of general abstraction, the conceptualization of the patient’s experience from a societal perspective is a crucial part of the rewordings. The verbal re-framing creates a potential for accessing stocks of societal knowledge that would not have been accessible based on the patient’s initial, individualistic and often erratic presentation of events. By changing the wording an experience is referred to, the therapist thus creates links to established collective knowledge about experiences of this category. Once such links to collective knowledge have been created, it then becomes possible to understand differently how the experience in question came to pass, which features it is characterized by and how it can be dealt with in a way that is collectively known to be helpful.

International Conference "Ecology. Human. Society"

2017 ◽  
Author(s):  
Daniel Benatov
Keyword(s):  
Educational Process ◽  
Direct Access ◽  
Human Society ◽  
Public Authorities ◽  
State Institutions ◽  
The Public ◽  
Market Participants ◽  
New Information ◽  
Training Courses ◽  
Process Element

Our conference is the first project of Student Science Association, which was restored in our University in 1998. The main peculiarity of the conference is the student organizing committee. The conference was attended by representatives of Russia, Belarus, Sweden, Poland, Bulgaria, Armenia, Azerbaijan, Czech Republic, Lithuania, Latvia, Georgia, Iran, not mentioning hundreds of Ukrainian participants. We’re happy with the fact that our conference allows students to discover new information, which they wouldn’t find in training courses manuals; contrariwise businesses and organizations can get direct access to young and qualified staff. We believe that events like our conference are useful for the young scientists and also for the public authorities and businesses. Conference "Ecology. Human. Society "is a part of feedback between universities and market participants. The conference has overgrown limits of being simple educational process element. Today, it is a serious recruiting resource for state institutions and businesses - an important part of a mutually beneficial dialogue.

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