Prediction Markets for Economic Forecasting

Erik Snowberg (), Justin Wolfers and Eric Zitzewitz
Additional contact information
Erik Snowberg: California Institute of Technology

No 6720, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: C5 G14 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2012-07
New Economics Papers: this item is included in nep-for
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published - published in: Handbook of Economic Forecasting, 2013, 2A, 657-684

Downloads: (external link)
https://docs.iza.org/dp6720.pdf (application/pdf)

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)
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:iza:izadps:dp6720

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().