An experiment on prediction markets in science.

Prediction markets are powerful forecasting tools. They have the potential to aggregate private information, to generate and disseminate a consensus among the market participants, and to provide incentives for information acquisition. These market functionalities can be very valuable for scientific...

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Autores principales:	Johan Almenberg, Ken Kittlitz, Thomas Pfeiffer
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2009
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/fea7d2f990ff49ab898a8306c0703ede
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id	oai:doaj.org-article:fea7d2f990ff49ab898a8306c0703ede
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spelling	oai:doaj.org-article:fea7d2f990ff49ab898a8306c0703ede2021-11-25T06:27:04ZAn experiment on prediction markets in science.1932-620310.1371/journal.pone.0008500https://doaj.org/article/fea7d2f990ff49ab898a8306c0703ede2009-12-01T00:00:00Zhttps://www.ncbi.nlm.nih.gov/pmc/articles/pmid/20041139/?tool=EBIhttps://doaj.org/toc/1932-6203Prediction markets are powerful forecasting tools. They have the potential to aggregate private information, to generate and disseminate a consensus among the market participants, and to provide incentives for information acquisition. These market functionalities can be very valuable for scientific research. Here, we report an experiment that examines the compatibility of prediction markets with the current practice of scientific publication. We investigated three settings. In the first setting, different pieces of information were disclosed to the public during the experiment. In the second setting, participants received private information. In the third setting, each piece of information was private at first, but was subsequently disclosed to the public. An automated, subsidizing market maker provided additional incentives for trading and mitigated liquidity problems. We find that the third setting combines the advantages of the first and second settings. Market performance was as good as in the setting with public information, and better than in the setting with private information. In contrast to the first setting, participants could benefit from information advantages. Thus the publication of information does not detract from the functionality of prediction markets. We conclude that for integrating prediction markets into the practice of scientific research it is of advantage to use subsidizing market makers, and to keep markets aligned with current publication practice.Johan AlmenbergKen KittlitzThomas PfeifferPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 4, Iss 12, p e8500 (2009)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Johan Almenberg Ken Kittlitz Thomas Pfeiffer An experiment on prediction markets in science.
description	Prediction markets are powerful forecasting tools. They have the potential to aggregate private information, to generate and disseminate a consensus among the market participants, and to provide incentives for information acquisition. These market functionalities can be very valuable for scientific research. Here, we report an experiment that examines the compatibility of prediction markets with the current practice of scientific publication. We investigated three settings. In the first setting, different pieces of information were disclosed to the public during the experiment. In the second setting, participants received private information. In the third setting, each piece of information was private at first, but was subsequently disclosed to the public. An automated, subsidizing market maker provided additional incentives for trading and mitigated liquidity problems. We find that the third setting combines the advantages of the first and second settings. Market performance was as good as in the setting with public information, and better than in the setting with private information. In contrast to the first setting, participants could benefit from information advantages. Thus the publication of information does not detract from the functionality of prediction markets. We conclude that for integrating prediction markets into the practice of scientific research it is of advantage to use subsidizing market makers, and to keep markets aligned with current publication practice.
format	article
author	Johan Almenberg Ken Kittlitz Thomas Pfeiffer
author_facet	Johan Almenberg Ken Kittlitz Thomas Pfeiffer
author_sort	Johan Almenberg
title	An experiment on prediction markets in science.
title_short	An experiment on prediction markets in science.
title_full	An experiment on prediction markets in science.
title_fullStr	An experiment on prediction markets in science.
title_full_unstemmed	An experiment on prediction markets in science.
title_sort	experiment on prediction markets in science.
publisher	Public Library of Science (PLoS)
publishDate	2009
url	https://doaj.org/article/fea7d2f990ff49ab898a8306c0703ede
work_keys_str_mv	AT johanalmenberg anexperimentonpredictionmarketsinscience AT kenkittlitz anexperimentonpredictionmarketsinscience AT thomaspfeiffer anexperimentonpredictionmarketsinscience AT johanalmenberg experimentonpredictionmarketsinscience AT kenkittlitz experimentonpredictionmarketsinscience AT thomaspfeiffer experimentonpredictionmarketsinscience
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An experiment on prediction markets in science.

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