Download or read book Interpreting Prediction Market Prices as Probabilities written by Justin Wolfers and published by . This book was released on 2006 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We provide relevant analytic foundations, describing sufficient conditions under which prediction markets prices correspond with mean beliefs. Beyond these specific sufficient conditions, we show that for a broad class of models prediction market prices are usually close to the mean beliefs of traders. The key parameters driving trading behavior in prediction markets are the degree of risk aversion and the distribution of beliefs, and we provide some novel data on the distribution of beliefs in a couple of interesting contexts. We find that prediction markets prices typically provide useful (albeit sometimes biased) estimates of average beliefs about the probability an event occurs.
Download or read book Interpreting Prediction Market Prices as Probabilities written by Justin Wolfers and published by . This book was released on 2011 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We provide relevant analytic foundations, describing sufficient conditions under which prediction markets prices correspond with mean beliefs. Beyond these specific sufficient conditions, we show that for a broad class of models prediction market prices are usually close to the mean beliefs of traders. The key parameters driving trading behavior in prediction markets are the degree of risk aversion and the distribution on beliefs, and we provide some novel data on the distribution of beliefs in a couple of interesting contexts. We find that prediction markets prices typically provide useful (albeit sometimes biased) estimates of average beliefs about the probability an event occurs.
Download or read book Interpreting Prediction Market Prices written by Jared Williams and published by . This book was released on 2017 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prediction market prices are often used as estimates of the probability of outcomes in future elections and referendums. I argue that this practice is often flawed, and I develop a model that empiricists can use to partially identify probabilities from prediction market prices. In the special case of log utility, election outcome probabilities can be fully (point) identified by a simple type of futures contract that is not commonly used in practice. Prediction markets are also used to examine whether stock market valuations would be higher under one election outcome than the other. I show that this question cannot be answered without assuming investors' higher-order beliefs are correct. In the case of the 2016 US presidential election, my model suggests that investors had incorrect higher-order beliefs, and that these incorrect higher-order beliefs affected the aggregate value of the S&P 500 by approximately $400 billion, or 2% of its aggregate value.
Download or read book Interpreting the Predictions of Predictions Markets written by Charles F. Manski and published by . This book was released on 2004 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Participants in prediction markets such as the Iowa Electronic Markets trade all-or-nothing contracts that pay a dollar if and only if specified future events occur. Researchers engaged in empirical study of prediction markets have argued broadly that equilibrium prices of the contracts traded are market probabilities' that the specified events will occur. This paper shows that if traders are risk-neutral price takers with heterogenous beliefs, the price of a contract in a prediction market reveals nothing about the dispersion of traders' beliefs and partially identifies the central tendency of beliefs. Most persons have beliefs higher than price when price is above 0.5, and most have beliefs lower than price when price is below 0.5. The mean belief of traders lies in an interval whose midpoint is the equilibrium price. These findings persist even if traders use price data to revise their beliefs in plausible ways.
Download or read book Prediction Markets written by Kevin Roebuck and published by Tebbo. This book was released on 2011 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prediction markets (also known as predictive markets, information markets, decision markets, idea futures, event derivatives, or virtual markets) are speculative markets created for the purpose of making predictions. The current market prices can then be interpreted as predictions of the probability of the event or the expected value of the parameter. People who buy low and sell high are rewarded for improving the market prediction, while those who buy high and sell low are punished for degrading the market prediction. Evidence so far suggests that prediction markets are at least as accurate as other institutions predicting the same events with a similar pool of participants. This book is your ultimate resource for Prediction Markets. Here you will find the most up-to-date information, analysis, background and everything you need to know. In easy to read chapters, with extensive references and links to get you to know all there is to know about Prediction Markets right away, covering: Prediction market, Assassination market, BlogShares, Contingency market, Cricket Stock Exchange, Election stock market, Futarchy, Nadex, Hollywood Stock Exchange, Hubdub, IMX, Incentive Markets, Infosurv Concept Exchange, Intrade, Iowa Electronic Markets, IPredict, NewsFutures, Policy Analysis Market, Popular Science Predictions Exchange, Prediction game, Stock market simulator, The simExchange, TradeSports, Trendio.com This book explains in-depth the real drivers and workings of Prediction Markets. It reduces the risk of your technology, time and resources investment decisions by enabling you to compare your understanding of Prediction Markets with the objectivity of experienced professionals.
Download or read book Prediction Markets written by Leighton Vaughan Williams and published by Routledge. This book was released on 2011-06-16 with total page 318 pages. Available in PDF, EPUB and Kindle. Book excerpt: How does one effectively aggregate disparate pieces of information that are spread among many different individuals? In other words, how does one best access the ‘wisdom of the crowd’? Prediction markets, which are essentially speculative markets created for the purpose of aggregating information and making predictions, offer the answer to this question. The effective use of these markets has the potential not only to help forecast future events on a national and international level, but also to assist companies, for example, in providing improved estimates of the potential market size for a new product idea or the launch date of new products and services. The markets have already been used to forecast uncertain outcomes ranging from influenza to the spread of infectious diseases, to the demand for hospital services, to the box office success of movies, climate change, vote shares and election outcomes, to the probability of meeting project deadlines. The insights gained also have many potentially valuable applications for public policy more generally. These markets offer substantial promise as a tool of information aggregation as well as forecasting, whether alone or as a supplement to other mechanisms like opinion surveys, group deliberations, panels of experts and focus groups. Moreover, they can be applied at a macroeconomic and microeconomic level to yield information that is valuable for government and commercial policy-makers and which can be used for a number of social purposes. This volume of original readings, contributed by many of the leading experts in the field, marks a significant addition to the base of knowledge about this fascinating subject area. The book should be of interest to anyone looking at monetary economics, economic forecasting and microeconomics.
Download or read book Prediction Markets written by Stefan Luckner and published by Springer Science & Business Media. This book was released on 2011-11-04 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accurate predictions are essential in many areas such as corporate decision making, weather forecasting and technology forecasting. Prediction markets help to aggregate information and gain a better understanding of the future by leveraging the wisdom of the crowds. Trading prices in prediction markets thus reflect the traders’ aggregated expectations on the outcome of uncertain future events and can be used to predict the likelihood of these events. This book demonstrates that markets are accurate predictors. Results from several empirical studies reported in this work show the importance of designing such markets properly in order to derive valuable predictions. Therefore, the findings are valuable for designing future prediction markets.
Download or read book Econometrics of Risk written by Van-Nam Huynh and published by Springer. This book was released on 2014-12-15 with total page 486 pages. Available in PDF, EPUB and Kindle. Book excerpt: This edited book contains several state-of-the-art papers devoted to econometrics of risk. Some papers provide theoretical analysis of the corresponding mathematical, statistical, computational, and economical models. Other papers describe applications of the novel risk-related econometric techniques to real-life economic situations. The book presents new methods developed just recently, in particular, methods using non-Gaussian heavy-tailed distributions, methods using non-Gaussian copulas to properly take into account dependence between different quantities, methods taking into account imprecise ("fuzzy") expert knowledge, and many other innovative techniques. This versatile volume helps practitioners to learn how to apply new techniques of econometrics of risk, and researchers to further improve the existing models and to come up with new ideas on how to best take into account economic risks.
Download or read book Handbook of Sports and Lottery Markets written by Donald B. Hausch and published by Elsevier. This book was released on 2011-08-11 with total page 561 pages. Available in PDF, EPUB and Kindle. Book excerpt: Its basic empirical research and investigation of pure theories of investment in the sports and lottery markets make this volume a winner. These markets are simpler to study than traditional financial markets, and their expected values and outcomes are uncomplicated. By means of new overviews of scholarship on the industry side of racetrack and other betting markets to betting exchanges and market efficiencies, contributors consider a variety of sports in countries around the world. The result is not only superior information about market forecasting, but macro- and micro-analyses that are relevant to other markets. - Easily studied sports markets reveal features relevant for more complex traditional financial markets - Significant coverage of sports from racing to jai alai - New studies of betting exchanges and Internet wagering markets
Download or read book Computing and Combinatorics written by Joachim Gudmundsson and published by Springer. This book was released on 2012-08-14 with total page 617 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book constitutes the refereed proceedings of the 18th Annual International Conference on Computing and Combinatorics, held in Sydney, Australia, in August 2012. The 50 revised full papers presented were carefully reviewed and selected from 121 submissions. Topics covered are algorithms and data structures; algorithmic game theory and online algorithms; automata, languages, logic, and computability; combinatorics related to algorithms and complexity; complexity theory; computational learning theory and knowledge discovery; cryptography, reliability and security, and database theory; computational biology and bioinformatics; computational algebra, geometry, and number theory; graph drawing and information visualization; graph theory, communication networks, and optimization.
Download or read book Handbook of Economic Forecasting written by Graham Elliott and published by Elsevier. This book was released on 2013-10-24 with total page 1386 pages. Available in PDF, EPUB and Kindle. Book excerpt: The highly prized ability to make financial plans with some certainty about the future comes from the core fields of economics. In recent years the availability of more data, analytical tools of greater precision, and ex post studies of business decisions have increased demand for information about economic forecasting. Volumes 2A and 2B, which follows Nobel laureate Clive Granger's Volume 1 (2006), concentrate on two major subjects. Volume 2A covers innovations in methodologies, specifically macroforecasting and forecasting financial variables. Volume 2B investigates commercial applications, with sections on forecasters' objectives and methodologies. Experts provide surveys of a large range of literature scattered across applied and theoretical statistics journals as well as econometrics and empirical economics journals. The Handbook of Economic Forecasting Volumes 2A and 2B provide a unique compilation of chapters giving a coherent overview of forecasting theory and applications in one place and with up-to-date accounts of all major conceptual issues. - Focuses on innovation in economic forecasting via industry applications - Presents coherent summaries of subjects in economic forecasting that stretch from methodologies to applications - Makes details about economic forecasting accessible to scholars in fields outside economics
Download or read book Information Efficiency in Financial and Betting Markets written by Leighton Vaughan Williams and published by Cambridge University Press. This book was released on 2005-09-29 with total page 412 pages. Available in PDF, EPUB and Kindle. Book excerpt: The degree to which markets incorporate information is one of the most important questions facing economists today. This book provides a fascinating study of the existence and extent of information efficiency in financial markets, with a special focus on betting markets. Betting markets are selected for study because they incorporate features highly appropriate to a study of information efficiency, in particular the fact that each bet has a well-defined end point at which its value becomes certain. Using international examples, this book reviews and analyses the issue of information efficiency in both financial and betting markets. Part I is an extensive survey of the existing literature, while Part II presents a range of readings by leading academics. Insights gained from the book will interest students of financial economics, financial market analysts, mathematicians and statisticians, and all those with a special interest in finance or gambling.
Download or read book Best Practices for Online Procurement Auctions written by Parente, Diane H. and published by IGI Global. This book was released on 2007-12-31 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: Offers a systematic approach to the examination of online procurement auctions. Growth in online auctions reinforces the need for understanding the factors important in auctions and the caveats that both researchers and practitioners need to know in order to effectively study and use the auction tool.
Download or read book Introduction to Urban Science written by Luis M. A. Bettencourt and published by MIT Press. This book was released on 2021-08-17 with total page 497 pages. Available in PDF, EPUB and Kindle. Book excerpt: A novel, integrative approach to cities as complex adaptive systems, applicable to issues ranging from innovation to economic prosperity to settlement patterns. Human beings around the world increasingly live in urban environments. In Introduction to Urban Science, Luis Bettencourt takes a novel, integrative approach to understanding cities as complex adaptive systems, claiming that they require us to frame the field of urban science in a way that goes beyond existing theory in such traditional disciplines as sociology, geography, and economics. He explores the processes facilitated by and, in many cases, unleashed for the first time by urban life through the lenses of social heterogeneity, complex networks, scaling, circular causality, and information. Though the idea that cities are complex adaptive systems has become mainstream, until now those who study cities have lacked a comprehensive theoretical framework for understanding cities and urbanization, for generating useful and falsifiable predictions, and for constructing a solid body of empirical evidence so that the discipline of urban science can continue to develop. Bettencourt applies his framework to such issues as innovation and development across scales, human reasoning and strategic decision-making, patterns of settlement and mobility and their influence on socioeconomic life and resource use, inequality and inequity, biodiversity, and the challenges of sustainable development in both high- and low-income nations. It is crucial, says Bettencourt, to realize that cities are not "zero-sum games" and that knowledge, human cooperation, and collective action can build a better future.
Download or read book Sports Betting written by Nicolae Sfetcu and published by Nicolae Sfetcu. This book was released on 2014-05-04 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sports betting is the general activity of predicting sports results by making a wager on the outcome of a sporting event. Aside from simple wagers--betting a friend that one's favorite baseball team will win its division, for instance, or buying a football "square" for the Super Bowl--sports betting is commonly done through a bookmaker. Bookmakers generally offer two types of wagers on the winner of a sporting event: a straight-up or money line bet, or a point spread wager. Moneylines and straight-up prices are used to set odds on sports such as soccer, baseball and hockey (the scoring nature of which renders point spreads impractical) as well as individual vs. individual matches, like boxing.
Download or read book Computational Context written by William F. Lawless and published by CRC Press. This book was released on 2018-12-07 with total page 223 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume addresses context from three comprehensive perspectives: first, its importance, the issues surrounding context, and its value in the laboratory and the field; second, the theory guiding the AI used to model its context; and third, its applications in the field (e.g., decision-making). This breadth poses a challenge. The book analyzes how the environment (context) influences human perception, cognition and action. While current books approach context narrowly, the major contribution of this book is to provide an in-depth review over a broad range of topics for a computational context no matter its breadth. The volume outlines numerous strategies and techniques from world-class scientists who have adapted their research to solve different problems with AI, in difficult environments and complex domains to address the many computational challenges posed by context. Context can be clear, uncertain or an illusion. Clear contexts: A father praising his child; a trip to the post office to buy stamps; a policewoman asking for identification. Uncertain contexts: A sneak attack; a surprise witness in a courtroom; a shout of "Fire! Fire!" Contexts as illusion: Humans fall prey to illusions that machines do not (Adelson’s checkerboard illusion versus a photometer). Determining context is not easy when disagreement exists, interpretations vary, or uncertainty reigns. Physicists like Einstein (relativity), Bekenstein (holographs) and Rovelli (universe) have written that reality is not what we commonly believe. Even outside of awareness, individuals act differently whether alone or in teams. Can computational context with AI adapt to clear and uncertain contexts, to change over time, and to individuals, machines or robots as well as to teams? If a program automatically "knows" the context that improves performance or decisions, does it matter whether context is clear, uncertain or illusory? Written and edited by world class leaders from across the field of autonomous systems research, this volume carefully considers the computational systems being constructed to determine context for individual agents or teams, the challenges they face, and the advances they expect for the science of context.
Download or read book Why Everyone Else Is a Hypocrite written by Robert Kurzban and published by Princeton University Press. This book was released on 2012-05-27 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: The evolutionary psychology behind human inconsistency We're all hypocrites. Why? Hypocrisy is the natural state of the human mind. Robert Kurzban shows us that the key to understanding our behavioral inconsistencies lies in understanding the mind's design. The human mind consists of many specialized units designed by the process of evolution by natural selection. While these modules sometimes work together seamlessly, they don't always, resulting in impossibly contradictory beliefs, vacillations between patience and impulsiveness, violations of our supposed moral principles, and overinflated views of ourselves. This modular, evolutionary psychological view of the mind undermines deeply held intuitions about ourselves, as well as a range of scientific theories that require a "self" with consistent beliefs and preferences. Modularity suggests that there is no "I." Instead, each of us is a contentious "we"--a collection of discrete but interacting systems whose constant conflicts shape our interactions with one another and our experience of the world. In clear language, full of wit and rich in examples, Kurzban explains the roots and implications of our inconsistent minds, and why it is perfectly natural to believe that everyone else is a hypocrite.
