Working Paper: NBER ID: w12060
Authors: Justin Wolfers; Eric Zitzewitz
Abstract: Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management -- in both the public and private sectors. This paper outlines five open questions in the literature, and we argue that resolving these questions is crucial to determining whether current optimism about prediction markets will be realized.
Keywords: No keywords provided
JEL Codes: C9; D7; D8; G1; M2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Attracting uninformed traders (G19) | Market success (L17) |
| Trader type (F19) | Market efficiency (G14) |
| Trader diversity (F29) | Market robustness (G10) |
| Contract design (K12) | Trader participation (G19) |
| Contract design (K12) | Market outcomes (D49) |
| Market structure (D49) | Trader behavior (L14) |
| Trader perceptions (F14) | Market efficiency (G14) |