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    Self-resolving information markets: a comparative study

    Ahlstrom-Vij, Kristoffer (2019) Self-resolving information markets: a comparative study. Journal of Prediction Markets , ISSN 1750-676X. (In Press)

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    Abstract

    Traditional information markets (TIMs) are resolved with reference to events external to the markets, such as some particular candidate winning an election. However, when making long-term forecasts or evaluating counterfactuals, such resolution is not an option. Hence, the need for self-resolving information markets (SRIMs), resolved with reference to features internal to the markets themselves. The present paper demonstrates experimentally that the market profiles of otherwise identical TIMs and SRIMs show significantly higher degrees of correlation than do randomly paired markets, and that the average accuracies of TIMs and SRIMs are practically equivalent. This supports the so-called face-value hypothesis, on which a convention will arise on SRIMs of taking the question under consideration at face value and betting accordingly, in the same way as on TIMs—in which case SRIMs have the potential of matching TIMs in accuracy while shedding their limitations in relation to long-term predictions and counterfactuals.

    Metadata

    Item Type: Article
    School: Birkbeck Schools and Departments > School of Social Sciences, History and Philosophy > Philosophy
    Depositing User: Kristoffer Ahlstrom-Vij
    Date Deposited: 13 Feb 2019 16:11
    Last Modified: 13 Jan 2020 17:44
    URI: http://eprints.bbk.ac.uk/id/eprint/26235

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