A combinatorial prediction market is one where users can construct their own bets by mixing and matching options in myriad ways

Posted on February 17, 2009 by Chris F. Masse

- either the bids are combinatorial (YooPick);

- or the outcomes are combinatorial.

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- either the market operator acts as an auctioneer; [*]

- or he acts as an automated market maker.

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[*] Jason, does this mean that a pure, real-money betting exchange (by “pure”, I mean without an automated market maker) could organize combinatorial prediction markets?

Sorry for asking, but market design is not my major. :-D

About Chris F. Masse

Founder and President of Midas Oracle
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2 Responses to A combinatorial prediction market is one where users can construct their own bets by mixing and matching options in myriad ways

  1. Jason Ruspini says:
    February 18, 2009 at 6:31 PM

    Sure, but the exchange would need to enumerate many propositions and it wouldn’t be feasible to have a contract for each one. It would also be more difficult for traders to find arbitrages and non-obvious complementary bets.

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