Prediction Markets, Decision Markets, and More – (PPT) – by Robin Hanson – 2006-12-13

– All speculation is “gambling”!

– In direct compare, beats alternatives – (Vs. Public Opinion – Vs. Public Experts – Vs. Private Experts)

– Advantages – (Numerically precise – Consistent across many issues – Frequently updated – Hard to manipulate – Need not say who how expert when – At least as accurate as alternatives)

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What&#8217-s above is about &#8220-prediction markets&#8221-. Now, below, here are possible instances of &#8220-decision markets&#8221- (a more complex form of prediction markets, structured to be a decision tool, not jut a forecasting tool):

Decision Market Applications

E[ Revenue | Switch ad agency? ]
E[ Revenue | Raise price 10%? ]
E[ Project done date | Drop feature? ]
E[ Project done date | Add personnel? ]
E[ Stock price | Fire CEO? ]
E[ Stock price | Acquire firm X? ]