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'''Welcome to the Prediction Markets wiki of the Graduate School of Management, University of Haifa''' | '''Welcome to the Prediction Markets wiki of the Graduate School of Management, University of Haifa''' | ||
- | This wiki | + | This wiki grows out of ongoing research work in the field of Prediction Markets and Collective Intelligence which is performed at the [http://mba2.haifa.ac.il/index.php/english- Graduate School of Management] of the [http://www.haifa.ac.il/index_eng.html University of Haifa], under the supervision of Prof. [http://rafaeli.net/ Sheizaf Rafaeli] and [http://gsb.haifa.ac.il/~draban/home/ Dr. Daphne Raban]. At its core lies a mapping of domain vocabulary to market implementations which is presented in a paper ''"P-MART: Towards a Classification of Online Prediction Markets"'', currently under review. |
- | + | The wiki is structured as a cross reference of '''[[:Category:Markets|Prediction Market implementations]]''' and '''[[:Category:Market properties|market attributes]]'''. The description of each market is contained in a separate wiki article and tagged with its attributes (in the form of wiki categories). In this way it is possible to view the property of each market, and access any market from any of its market property. It is also possible to access all markets and market properties from the sidebar. In the main page you will find an overview of the Prediction Markets classification, where each of the market attribute is listed in '''bold''' and links to its category page. | |
- | + | The objective of this wiki is to act as a knowledge repository for researchers and practitioners in the field of Prediction Markets. True to our belief in the value of collaboration we encourage you to contribute to this wiki. It is expected that through on-going contribution the domain vocabulary will be fine-tuned as the domain knowledge expands, and the implementation repository will grow as new examples emerge. Contributors need to register first. In order to maintain the structure of this wiki please follow [[Editing guidelines|editing guidelines]]. | |
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+ | For more details contact [[User:Dorit.Geifman|Dorit Geifman]] | ||
== Introduction == | == Introduction == | ||
We can trace the origins of the Prediction Markets concept to the works of [http://en.wikipedia.org/wiki/Friedrich_Hayek Friedrich Hayek], the winner of the Nobel Prize in Economics, and a social and political philosopher. Hayek claimed that the price mechanism serves to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization. | We can trace the origins of the Prediction Markets concept to the works of [http://en.wikipedia.org/wiki/Friedrich_Hayek Friedrich Hayek], the winner of the Nobel Prize in Economics, and a social and political philosopher. Hayek claimed that the price mechanism serves to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization. | ||
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+ | We are now starting to witness the proliferation of Information Markets into the corporate decision-making environment. One of the pioneering organizations to use Prediction Market as an internal decision-support tool is Hewlett Packard, which is using it as a sales forecasting tool. Intel too is using Information Markets for managing products forecast and production plans. There is evidence that many other organizations like Google, Eli Lilly and Microsoft are jumping into the water, but most of this activity is still in an experimental stage. Organizations are still trying to figure out the kind of incentives to be used, how to make sure that established hierarchies are not threatened and how to maintain a cost effective process etc. | ||
== What are Prediction Markets used for? == | == What are Prediction Markets used for? == | ||
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Prediction Markets cover a wide range of topics. These may be in the areas of '''[[:Category:Current or recreation events|Current or recreation events]]''', '''[[:Category:Business topics|Business topics]]''', '''[[:Category:Policy issues|Policy issues]]''', '''[[:Category:Synthetic events|Synthetic events]]''' etc. | Prediction Markets cover a wide range of topics. These may be in the areas of '''[[:Category:Current or recreation events|Current or recreation events]]''', '''[[:Category:Business topics|Business topics]]''', '''[[:Category:Policy issues|Policy issues]]''', '''[[:Category:Synthetic events|Synthetic events]]''' etc. | ||
- | == In what setting are | + | == In what setting are markets used? == |
Prediction markets are implemented in a variety of environments | Prediction markets are implemented in a variety of environments | ||
* '''[[:Category:Public domain markets|Public domain]]''' – open to the general public. May take the form of stand-alone web-sites e.g. [[Intrade]] or add-ons to larger web-sites e.g. [http://www.ftpredict.com/ FTPredict] of the Financial Times. | * '''[[:Category:Public domain markets|Public domain]]''' – open to the general public. May take the form of stand-alone web-sites e.g. [[Intrade]] or add-ons to larger web-sites e.g. [http://www.ftpredict.com/ FTPredict] of the Financial Times. | ||
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* '''[[:Category:Field experiment|Field experiments]]''' – controlled experiments in real-world settings | * '''[[:Category:Field experiment|Field experiments]]''' – controlled experiments in real-world settings | ||
- | == | + | == How do Prediction Markets work? == |
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Prediction Markets differ in their internal design, operational model and structure of assets. In this section we will provide an overview and references for more detailed information. | Prediction Markets differ in their internal design, operational model and structure of assets. In this section we will provide an overview and references for more detailed information. | ||
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=== Trading currency === | === Trading currency === | ||
- | + | Trading may be executed through the use of '''[[:Category:Real-money|Real-money]]''', i.e. trader’s money or play-money with a well defined monetary exchange rate, or '''[[:Category:Play-money|Play-money]]''', which is not directly tied to the final reward. | |
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=== Trading funds === | === Trading funds === | ||
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* '''[[:Category:Initial securities endowment|Initial securities endowment]]''' – traders' accounts are initialized with a number of securities. | * '''[[:Category:Initial securities endowment|Initial securities endowment]]''' – traders' accounts are initialized with a number of securities. | ||
- | === Market size === | + | === Market size and duration === |
- | the number of | + | The market size is defined by the number of ''active'' traders during market activity period. This may range from '''[[:Category:Small size markets|small]]''', 15 or less, through '''[[:Category:Medium size markets|medium]]''' – 15 – 50 traders, to '''[[:Category:Large markets|large]]''' – larger than 50, common in public markets but can also be found in corporate settings |
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- | + | Markets should be open as long as new information streams in, whether information that is exogenous to the market or information that is inferred from market price, and as long as the actual outcome is yet unknown. Here their duration is arbitrarily defined as: | |
- | Markets should be open as long as new information streams in, whether information that is exogenous to the market or information that is inferred from market price, and as long as the actual outcome is yet unknown. | + | |
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* '''[[:Category:Short duration|Short]]''' – does not exceed one day, in a laboratory setting usually lasts a few minutes | * '''[[:Category:Short duration|Short]]''' – does not exceed one day, in a laboratory setting usually lasts a few minutes | ||
* '''[[:Category:Medium duration|Medium]]''' – a few days, does not exceed one week | * '''[[:Category:Medium duration|Medium]]''' – a few days, does not exceed one week | ||
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* '''[[:Category:Variable duration|Variable]]''' – the market closing date is defined ad-hoc, and is dictated by the topic of the market and the external events which affect the subject of trade. | * '''[[:Category:Variable duration|Variable]]''' – the market closing date is defined ad-hoc, and is dictated by the topic of the market and the external events which affect the subject of trade. | ||
- | === Interaction === | + | === Interaction means === |
Does the market platform or trading procedure enable complementary information exchange between traders? | Does the market platform or trading procedure enable complementary information exchange between traders? | ||
* '''[[:Category:No interaction|No interaction]]''' – platform does not facilitate interaction among traders. Traders are instructed to refrain from off platform interaction. | * '''[[:Category:No interaction|No interaction]]''' – platform does not facilitate interaction among traders. Traders are instructed to refrain from off platform interaction. | ||
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=== Judgment biases === | === Judgment biases === | ||
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== Resources == | == Resources == | ||
- | === | + | === References & Bookmarks === |
- | * [http:// | + | * [http://del.icio.us/doritgsb/predictionmarkets del.icio.us Prediction Markets tag] - various bookmarks on the topic. |
+ | * [http://www.midasoracle.org/predictions/exchanges/ Prediction Exchanges] - a list from Midas Oracle .Org | ||
+ | * [http://www.forecastingprinciples.com/PM/ Special Interest Group on Prediction Markets] - International Institute of Forecasters, IIF | ||
+ | * [http://www.crowdworx.de/de/news/crowdworx-library CrowdWorkx] | ||
=== Books === | === Books === | ||
- | * ''' | + | * '''Abramowicz, M.''' (2008). ''Predictocracy: Market Mechanisms for Public and Private Decision Making.'' Yale University Press. |
- | + | * '''Surowiecki, J.''' (2004). ''The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations.'' Doubleday. | |
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- | + | === Wikis & Blogs === | |
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- | + | * [http://en.wikipedia.org/wiki/Prediction_market Wikipedia on Prediction Markets] | |
- | * [http:// | + | * [http://crowdcast.com/wordpress/ Crowdcast Corporate blog] |
+ | * [http://blog.mercury-rac.com/ Mercury's Blog] - Jed Christiansen's blog | ||
+ | * [http://blog.inklingmarkets.com/ Inkling Corporate blog] | ||
+ | * [http://www.midasoracle.org/ Midas Oracle] - Chris F. Masse's blog | ||
+ | * [http://blog.oddhead.com/ Oddhead Blog] David Pennock's blog] | ||
+ | * [http://www.overcomingbias.com/ overcomingbias] - Robin Hanson's blog | ||
+ | * [http://torontopm.wordpress.com/ Toronto Prediction Market Blog] - Paul Hewitt's blog | ||
=== Research Data === | === Research Data === | ||
- | + | Public exchanges that open their data for academic research | |
* In [http://www.biz.uiowa.edu/iem/archive/index.html Iowa Electronic Markets (IEM)] you can find historical data and research papers. | * In [http://www.biz.uiowa.edu/iem/archive/index.html Iowa Electronic Markets (IEM)] you can find historical data and research papers. | ||
* In [http://www.tradesports.com/data/ TradeSports] you can gain access to historical data (2004-2006), mostly sports, some political and entertainment. | * In [http://www.tradesports.com/data/ TradeSports] you can gain access to historical data (2004-2006), mostly sports, some political and entertainment. |