Prediction Market Design
This article surveys (a) the challenges of transitioning the results from prediction-market experiments under laboratory conditions to outside-world conditions devoid of laboratory controls, (b) the abilities of current (as of this writing, in 2007) implementations of prediction markets to address these challenges, and (c) opportunities for research into future market designs which are robust to these challenges.
KeywordsExperimental methods in economics Goodhart’s Law Information aggregation Iowa electronic markets Laboratory markets Moral hazard Planning Prediction market design Prediction markets Subjective probability
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