Prediction Market Performance in the 2016 U.S. Presidential Election

Andreas Graefe

Foresight: The International Journal of Applied Forecasting, 2017, issue 45, 38-42

Abstract: The 2016 U.S. presidential election was a particularly bad case for prediction markets, as was the Brexit vote in the UK. In theory, these markets should be very effective in aggregating the information of individual forecasters into an overall market forecast. Because the individual participants must put "skin in the game," they are expected to be more diligent about making use of relevant information than participants in surveys who are simply asked what they think will happen. In this article, Foresight's Prediction Markets Editor Andreas Graefe reviews the recent performance of prediction markets to explain why the theoretical benefits of this approach to forecasting have not always stood up in practice. He raises the possibilities of market manipulation, participant misunderstanding, and bettors' systematic bias. Copyright International Institute of Forecasters, 2017

Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://foresight.forecasters.org/shop/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:for:ijafaa:y:2017:i:45:p:38-42

Access Statistics for this article

More articles in Foresight: The International Journal of Applied Forecasting from International Institute of Forecasters Contact information at EDIRC.
Bibliographic data for series maintained by Michael Gilliland ().