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 condueted, 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 Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes in its series SFB 373 Discussion Papers with number 2002,29.
Date of creation: 2002
Date of revision:
experimental asset markets; prognosis; market efficiency;
Other versions of this item:
- Carsten Schmidt & Axel Werwatz, 2002. "How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment," Papers on Strategic Interaction 2002-09, Max Planck Institute of Economics, Strategic Interaction Group.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D4 - Microeconomics - - Market Structure and Pricing
- G1 - Financial Economics - - General Financial Markets
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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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