TY  - RPRT
        AU  - Wolfers, Justin
AU  - Zitzewitz, Eric
        TI  - Prediction Markets in Theory and Practice
        PY  - 2006/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1991
        UR  - https://www.iza.org/index.php/publications/dp1991
        AB  - Prediction Markets, sometimes referred to as "information markets", "idea futures" or "event futures", are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market-aggregated forecasts. This article summarizes the recent literature on prediction markets, highlighting both theoretical contributions that emphasize the possibility that these markets efficiently aggregate disperse information, and the lessons from empirical applications which show that market-generated forecasts typically outperform most moderately sophisticated benchmarks. Along the way, we highlight areas ripe for future research.
        KW  - information aggregation
KW  - information markets
KW  - prediction markets
        ER  -