Main Page

Revision as of 08:35, 24 May 2010 (view source)

Dorit.Geifman (Talk | contribs)

(→Market models)

← Older edit

Revision as of 08:36, 24 May 2010 (view source)

Dorit.Geifman (Talk | contribs)

Newer edit →

Line 68:

This section will first outline the basic market models and then describe the architectures that have been proposed and are used for Prediction Markets. For each model, data or platforms suitable for research purposes will be mentioned.

-

~~==== Market Models ====~~

-

~~Prediction Markets implement various exchange models and pricing mechanism:~~

-

* '''[[:Category:Continuous Double Auction (CDA)|Continuous Double Auction (CDA)]]''' where the market mechanism continuously matches orders to buy an asset (bid) with orders to sell an asset (ask).

-

* '''[[:Category:Market Scoring Rules (MSR)|Market Scoring Rules (MSR)]]''' – traders can continuously update their score rating i.e. the estimates of the probabilities of the event, and the underlying pricing function calculates the new probabilities (price). The model implements an automatic market maker.

-

* '''[[:Category:Dynamic Pari-Mutuel (DPM)|Dynamic Pari-Mutuel (DPM)]]''' - a hybrid between the Pari-Mutual model, where all bets are placed in a pool which is later divided between the winners, and the Continuous Double Auction models

-

* '''Wagering markets'''

-

This model is typically found in sports and horse betting institutions. In this case the bookmaker sets the odds according to some expert opinion. The bookmaker may change the odds according to the level of betting, however the odds or the price are fixed at the time of the bet. The bookmaker profits by offering different odds for the two(or more if applicable)sides of the bet.

-

* '''Scoring rules'''

-

Scoring rules are used in the case(the simple scenario)where the outcome of an event has 'n' states and the sum of their probability to occur is 1. The trader is asked to report her opinion on the probability distribution between the states. Once the true state is known, the trader gets a reward which is proportionate to the probably s/he indicated for that event. This requires the market to have a patron that agrees to pay the reward.

-

~~=== Operation Models ===~~

==== The Iowa Electronic Markets model ====

From P-MART wiki

Revision as of 08:36, 24 May 2010

Views

Personal tools

Navigation

Search

Toolbox

@@ Line 68: / Line 68: @@
 This section will first outline the basic market models and then describe the architectures that have been proposed and are used for Prediction Markets. For each model, data or platforms suitable for research purposes will be mentioned.
-==== Market Models ====
-Prediction Markets implement various exchange models and pricing mechanism:
-* '''[[:Category:Continuous Double Auction (CDA)|Continuous Double Auction (CDA)]]''' where the market mechanism continuously matches orders to buy an asset (bid) with orders to sell an asset (ask).
-* '''[[:Category:Market Scoring Rules (MSR)|Market Scoring Rules (MSR)]]''' – traders can continuously update their score rating i.e. the estimates of the probabilities of the event, and the underlying pricing function calculates the new probabilities (price). The model implements an automatic market maker.
-* '''[[:Category:Dynamic Pari-Mutuel (DPM)|Dynamic Pari-Mutuel (DPM)]]''' - a hybrid between the Pari-Mutual model, where all bets are placed in a pool which is later divided between the winners, and the Continuous Double Auction models
-* '''Wagering markets'''
-This model is typically found in sports and horse betting institutions. In this case the bookmaker sets the odds according to some expert opinion. The bookmaker may change the odds according to the level of betting, however the odds or the price are fixed at the time of the bet. The bookmaker profits by offering different odds for the two(or more if applicable)sides of the bet.
-* '''Scoring rules'''
-Scoring rules are used in the case(the simple scenario)where the outcome of an event has 'n' states and the sum of their probability to occur is 1. The trader is asked to report her opinion on the probability distribution between the states. Once the true state is known, the trader gets a reward which is proportionate to the probably s/he indicated for that event. This requires the market to have a patron that agrees to pay the reward.
-=== Operation Models ===
 ==== The Iowa Electronic Markets model ====