Betting markets have been around for a long time, and as far as I know, until recently they were all created to help traders achieve goals such as hedging, gambling, proving themselves, and so on. What appears to be new is that non-traders are now creating and subsidizing some markets, in order to gain information by believing the market prices. Such price estimates are remarkably robust against biases, making this a promising approach to reducing bias.
A 1990 Corporate Prediction Market
A 1990 Corporate Prediction Market
A 1990 Corporate Prediction Market
Betting markets have been around for a long time, and as far as I know, until recently they were all created to help traders achieve goals such as hedging, gambling, proving themselves, and so on. What appears to be new is that non-traders are now creating and subsidizing some markets, in order to gain information by believing the market prices. Such price estimates are remarkably robust against biases, making this a promising approach to reducing bias.
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