Felix Salmon is cautiously bullish on prediction markets.

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QUESTION: Tell me what you think of the (public, real-money) &#8220-prediction markets&#8221- (a.k.a. betting markets) without citing the names of either Robin Hanson or Justin Wolfers. Thanks. Are they useful, really? If not, then why are econ bloggers in love with them?


I used to be a bigger fan of them, before I discovered their enormous transaction costs:
If and when somebody makes an easy legal and cheap prediction market, I think it will be very useful indeed. For the time being, they&#8217-re interesting and fun.

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