IDEAS home Printed from https://ideas.repec.org/a/buc/jpredm/v1y2007i1p17-41.html
   My bibliography  Save this article

Prediction Markets: Practical Experiments in Small Markets and Behaviours Observed

Author

Listed:
  • Jed D. Christiansen

Abstract

This paper discusses a series of prediction markets created and operated in the summer of 2006 to measure calibration and behaviour of small-scale prediction markets. The research finds that small markets are very well calibrated and determines a potential minimum threshold of participation to ensure well-calibrated results. The results also established the markets as very efficient at predicting small probabilities. Behavioural aspects of markets are also examined. Trader behavioural types are assessed and categorised; while a small group of traders were extremely active, over half of all traders rarely traded. Market manipulation is examined and found to be occasionally effective, though only in very small markets. Finally, incentives to trade are discussed; these markets were effective with no incentives for trading at all.

Suggested Citation

  • Jed D. Christiansen, 2007. "Prediction Markets: Practical Experiments in Small Markets and Behaviours Observed," Journal of Prediction Markets, University of Buckingham Press, vol. 1(1), pages 17-41, February.
  • Handle: RePEc:buc:jpredm:v:1:y:2007:i:1:p:17-41
    as

    Download full text from publisher

    File URL: http://www.ingentaconnect.com/content/ubpl/jpm/2007/00000001/00000001/art00003
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graefe, Andreas & Armstrong, J. Scott, 2011. "Comparing face-to-face meetings, nominal groups, Delphi and prediction markets on an estimation task," International Journal of Forecasting, Elsevier, vol. 27(1), pages 183-195, January.
    2. Lionel Page & Robert T. Clemen, 2013. "Do Prediction Markets Produce Well‐Calibrated Probability Forecasts?-super-," Economic Journal, Royal Economic Society, vol. 123(568), pages 491-513, May.
    3. Edoardo Gaffeo, 2013. "Using information markets in grantmaking. An assessment of the issues involved and an application to Italian banking foundations," DEM Discussion Papers 2013/08, Department of Economics and Management.
    4. Bundzel, Marek & Kasanický, Tomáš & Pinčák, Richard, 2016. "Using string invariants for prediction searching for optimal parameters," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 444(C), pages 680-688.
    5. Lennart Sjöberg, 2009. "Are all crowds equally wise? a comparison of political election forecasts by experts and the public," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 28(1), pages 1-18.
    6. Buckley, Patrick, 2016. "Harnessing the wisdom of crowds: Decision spaces for prediction markets," Business Horizons, Elsevier, vol. 59(1), pages 85-94.
    7. Goodwin, Paul & Meeran, Sheik & Dyussekeneva, Karima, 2014. "The challenges of pre-launch forecasting of adoption time series for new durable products," International Journal of Forecasting, Elsevier, vol. 30(4), pages 1082-1097.
    8. Tobias Kranz & Florian Teschner & Christof Weinhardt, 2015. "Beware of Performance Indicators," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 57(6), pages 349-361, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:buc:jpredm:v:1:y:2007:i:1:p:17-41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross). General contact details of provider: http://www.ubpl.co.uk/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.