Fundamentals of Prediction Markets

Stefan Luckner, Jan Schröder, Christian Slamka, Markus Franke, Andreas Geyer-Schulz, Bernd Skiera, Martin Spann and Christof Weinhardt

Chapter 2 in Prediction Markets, 2012, pp 6-10 from Springer

Abstract: Abstract After a short history of prediction markets in Section 2.1, we define prediction markets as markets that run for “the primary purpose of aggregating information so that market prices forecast future events” (Berg and Rietz, 2003) in Section 2.2. The theoretic foundations of prediction markets are found in Hayek’s analysis of market-based economies and in the rose of information in Fama’s efficient market hypothesis in Section 2.3. The interaction between incentives for trade information revelation by trading transactions and the resulting adaption of prices is illustrated by a hands-on example in Section 2.4 on the operational principle of prediction markets.

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-8349-7085-5_2

Ordering information: This item can be ordered from
http://www.springer.com/9783834970855

DOI: 10.1007/978-3-8349-7085-5_2

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().