Prediction Markets within the Forecasting Community

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I have downloaded the final program schedule (PDF file) of the 28th International Symposium on Forecasting, and browsed thru all the paper abstracts that will be presented. Wow. There are dozens and dozens.. many one hundred or two&#8230- It took me a while to get to the bottom of that file.

I saw 3 or 4 papers on prediction markets (or &#8220-betting markets&#8221-).

I spotted some names I know. :-D

Besides Andreas, who will be at Nice for the symposium?

The field of prediction markets can be seen as a sub-set of the forecasting community. However, browsing the forecasting paper abstracts, I came up with the idea that we are competitors of all those guys / gals. We propose a process by which traders (like bees) go out there and gather all bits of information (sometimes coming from those forecasting experts), and a market mechanism delivers a collective verdict about what&#8217-s going to happen. One can set up a prediction market, and skips the reading of those forecasting experts&#8217- reports &#8212-let the incentivized traders do the work. In that perspective, the prediction market process is both more meta than the forecasting methods and also a competitor of them.

Why bother reading all those forecasting experts&#8217- reports when we can read the prediction markets?

Convenience, convenience, convenience.

Time is money. Let the incentivized traders do the time-consuming work.

And we get the honey. :-D

One thought on “Prediction Markets within the Forecasting Community

  1. Sean said:

    Exactly. Well stated.  The bad (ie good) thing about markets in general (prediction or

    otherwise) is that they replace – with lower cost and usually higher quality – ‘experts.’

    Of course some ‘experts’ find this unsettling…

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