Prediction markets as forecasting tool in decision processes

Meer over het boek

This work presents an in-depth examination of prediction markets, an innovative forecasting method known for its high accuracy in various domains. In these markets, users trade virtual stocks linked to uncertain future events, selling overvalued stocks and buying undervalued ones. This competitive dynamic leads to trading prices that reflect the aggregated beliefs of traders, resulting in a consensus prediction. The research explores the theoretical foundations of prediction markets, highlighting their key advantages and limitations. It includes two empirical studies: the first compares the accuracy of a real-money prediction market against a large survey, while the second investigates the level of trust participants have in prediction market forecasts. Through a series of market experiments, the second study identifies factors influencing participants' trust in this forecasting method. This work is particularly valuable for scholars interested in decision-making and forecasting processes, as well as practitioners looking to implement prediction markets for corporate forecasting.