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== Why do traders participate? == | == Why do traders participate? == | ||
| + | Market institutions use a variety of incentive schemes in order to encourage participation. These may take the following forms: | ||
| + | * '''[[:Category:Performance incentive|Performance]]''' - payoffs are directly tied to the performance of the trader, i.e. gains profits from trading. | ||
| + | * '''[[:Category:Performance-rank incentive|Performance rank]]''' – reward is associated with the rank of the trader in the descending list of performance. | ||
| + | * '''[[:Category:Participation incentive|Participation]]''' – reward is tied to participation. Can be associated with participation level or drawn by lottery. | ||
| + | * '''[[:Category:Contribution incentive|Contribution]]''' – participants are rewarded for their contribution to the marketplace, e.g. creation of new markets. | ||
| + | The traders may be awarded a '''[[:Category:Monetary reward|cash]]''' payment, a material, non-monetary '''[[:Category:Gift reward|prize]]''', '''[[:Category:Bonus shares reward|bonus shares]]''' or an intangible reward such as '''[[:Category:Reputational reward|increased reputation]]''' or '''[[:Category:Intrinsic reward|intrinsic satisfaction]]'''. | ||
== Is the market outcome accurate? == | == Is the market outcome accurate? == | ||
