Group Prediction in Information Markets With and Without Trading Information and Price Manipulation Incentives
Dorina Tila () and
David Porter
Working Papers from Chapman University, Economic Science Institute
Abstract:
The ability of individuals and groups to forecast a future event, with incomplete information, by using the trading history of an asset market is analyzed in the laboratory. The results show: (1) when forecasters observe the summary of markettransacted prices, they do not perform as well as when they are provided with a complete real-time sequence of bids, asks and contract prices; (2) groups do not outperform individuals in forecasting, and when the market does not have price manipulation incentives, individual prediction is better than the group prediction; (3) in markets with manipulators, where only a summary of contract prices is provided, both groups and individuals are unable to predict better than flipping a coin. This inability to aggregate information is remedied when forecasters see the complete evolution of market bids, asks and contracts.
Pages: 40 pages
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.chapman.edu/ESI/wp/Porter_GroupPredictionInformationMarkets.pdf (application/pdf)
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:chu:wpaper:08-06
Access Statistics for this paper
More papers in Working Papers from Chapman University, Economic Science Institute Contact information at EDIRC.
Bibliographic data for series maintained by Megan Luetje ().