Prediction Markets for Economic Forecasting

Erik Snowberg, Justin Wolfers and Eric Zitzewitz

No 3884, CESifo Working Paper Series from CESifo

Abstract: Prediction markets - markets used to forecast future events - have been used to accurately forecast the outcome of political contests, sporting events, and, occasionally, economic outcomes. This chapter summarizes the latest research on prediction markets in order to further their utilization by economic forecasters. We show that prediction markets have a number of attractive features: they quickly incorporate new information, are largely efficient, and impervious to manipulation. Moreover, markets generally exhibit lower statistical errors than professional forecasters and polls. Finally, we show how markets can be used to both uncover the economic model behind forecasts, as well as test existing economic models.

Keywords: prediction markets; forecasting (search for similar items in EconPapers)
JEL-codes: C50 G14 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Chapter: Prediction Markets for Economic Forecasting (2013)
Working Paper: Prediction Markets for Economic Forecasting (2012)
Working Paper: Prediction Markets for Economic Forecasting (2012)
Working Paper: Prediction Markets for Economic Forecasting (2012)
Working Paper: Prediction Markets for Economic Forecasting (2012)
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