Statement on Prediction Markets

Robert Hahn May 7th, 2007

The AEI-Brookings Joint Center recently issued a statement on prediction markets signed by leading scholars in the field. In it, we argue that U.S. regulators should lower barriers to the creation and design of prediction markets by creating a safe harbor for certain types of small stakes markets. We believe our proposed change has the potential to stimulate innovation in the design and use of prediction markets throughout the economy, and in the process to provide information that will benefit the private sector and government alike.

Please take a look at the statement, available on SSRN here.

Thanks.

Robert Hahn
Executive Director
AEI-Brookings Joint Center
www.aei-brookings.org

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Comments(4)

4 Responses to “Statement on Prediction Markets”

# Bo Cowgill on 07 May 2007 at 7:22 pm

I’m surprised this hasn’t gotten more attention, given that three of the signatories are Nobel Laureates in Economics (Kenneth Arrow, Daniel Kahneman and Thomas Schelling). Milgrom, Shiller and Varian are likewise giants — not to mention some of the biggest names in the younger generation of economists.

Surprised that nobody on Midas Oracle or Malone’s PM Google Group has pointed this out. The Nobel Laureates thing makes a good sound bite. Anyone know if AEI is planning to promote this in any way, perhaps with a press release? Would be tragic if it sat in the banks of SSRN …
# Chris. F. Masse on 08 May 2007 at 1:42 am

Bo Cowgill,

#1. I have sent the link to Tyler Cowen of Marginal Revolution, who is in London. He’ll look at it when he has time.

#2.I was tipped just yesterday by AEI-Brookings. I helped Bob Hahn’s assistant and I published on it in the next hour.

So, it’s just out of the “think tank”. Promotion of the text will take place now.

As for the commenting, it’s not because a text is important that it will provoke a flurry of comments. People like to read important messages on local and reflect on it for a while.
# Chris. F. Masse on 08 May 2007 at 6:16 am

AEI-BROOKINGS should have made Tyler Cowen, Steve Levitt and Greg Mankiw sign the petition.

–> blog coverages

—

Economists’ Petition on Prediction Markets
http://www.midasoracle.org/200.....n-markets/

Economists Speak Out on Prediction Markets
by Steven D. Levitt on 08 May 2007
http://www.freakonomics.com/bl.....n-markets/

Steve Levitt of Freakonomics: I WON’T SIGN YOUR PETITION, BOB.
http://www.midasoracle.org/200.....ition-bob/

Chris Masse’s comment on the Freakonomics blog post about the legality of US prediction markets
http://www.midasoracle.org/200.....n-markets/

PREDICTION MARKET PETITION: Robin Hanson vs. Steve Levitt
http://www.midasoracle.org/200.....ve-levitt/

The limitations of logic (and the need for passion)
http://www.midasoracle.org/200.....r-passion/

TechDirt
Economists Want Legal Protection For Prediction Markets
http://techdirt.com/articles/20070507/115848.shtml
10 comments (including our Mike Linksvayer )
# Michael Giberson on 09 May 2007 at 10:40 am

Re: Bo Cowgill’s comment

Actually, four Nobel Laureates in Economics. Add Vernon Smith to your list.