How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment
AbstractFor the Euro 2000 Soccer Championships an experimental asset market was conducted, with traders buying and selling contracts on the winners of individual matches. Market-generated probabilities are compared to professional bet quotas, and factors that are responsible for the quality of the market prognosis are identified. The comparison shows, that the market is more accurate than the random predictor and slightly better than professional bet quotas, in the sense of mean square error. Moreover, the more certain the market predicts the outcome of an event the more accurate is the prediction.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2002-09.
Length: 22 pages
Date of creation: Mar 2002
Date of revision:
Other versions of this item:
- Schmidt, Carsten & Werwatz, Axel, 2002. "How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment," SFB 373 Discussion Papers 2002,29, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D4 - Microeconomics - - Market Structure and Pricing
- G1 - Financial Economics - - General Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-15 (All new papers)
- NEP-EXP-2002-04-15 (Experimental Economics)
- NEP-SPO-2002-04-15 (Sports & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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SFB 373 Discussion Papers
2001,57, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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