About

This special interest group has been established as a resource for researchers and practitioners who are interested in the field of prediction markets.

Aggregating private information from individuals, prediction markets are a judgmental forecastingmethod. Participants reveal private information by trading contracts whose pay-off is tied to the outcomes of future events. The market automatically aggregates the dispersed bits of information and produces dynamic forecasts.

For example, a contract on the outcome of an election pays $100 only if candidate X wins the election, and $0 otherwise. Assuming a current price of this contract of $45, the market forecasts a probability of 45% that candidate X will win the election.

Being part of Forecasting Principles, this SIG aims at presenting research findings that support evidence-based principles. In particular, the site covers ongoing research that provides guidelines, prescriptions, rules, conditions, action statements, or advice about what to do in given situations.

© Copyright 1997-2009 by J. Scott Armstrong. All rights are reserved. Web Design by Zoe Communications Ltd.
This site is directed by J. Scott Armstrong and Kesten C. Green.

The Forecasting Principles site was sponsored by the Marketing Department of The Wharton School, University of Pennsylvania for the first nine years. The International Institute of Forecasters has been a sponsor since July 2006.