EconPapers    
Economics at your fingertips  
 

Prediction Markets in Theory and Practice

Justin Wolfers () and Eric Zitzewitz ()

Research Papers from Stanford University, Graduate School of Business

Abstract: Prediction Markets, sometimes referred to as "information markets," "idea futures" or "event futures", are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market-aggregated forecasts. This article summarizes the recent literature on prediction markets, highlighting both theoretical contributions that emphasize the possibility that these markets efficiently aggregate disperse information, and the lessons from empirical applications which show that market-generated forecasts typically outperform most moderately sophisticated benchmarks. Along the way, we highlight areas ripe for future research.

JEL-codes: C53 (search for similar items in EconPapers)
Date: 2006-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
http://gsbapps.stanford.edu/researchpapers/library/RP1927.pdf

Related works:
Working Paper: Prediction Markets in Theory and Practice (2006) Downloads
Working Paper: Prediction Markets in Theory and Practice (2006) Downloads
Working Paper: Prediction Markets in Theory and Practice (2006) Downloads
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:ecl:stabus:1927

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-07-10
Handle: RePEc:ecl:stabus:1927