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Statistical Tests of Real‐Money versus Play‐Money Prediction Markets
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2006 | Electronic Markets | Citations: 0
Authors: Rosenbloom, E. S.; Notz, William

Abstract: Prediction markets are mechanisms that aggregate information such that an estima ... Expand

Abstract: Prediction markets are mechanisms that aggregate information such that an estimate of the probability of some future event is produced. It has been established that both real‐money and play‐money prediction markets are reasonably accurate. An SPRT‐like test is used to determine whether there are statistically significant differences in accuracy between the two markets. The results establish that real‐money markets are significantly more accurate for non‐sports events. We also examine the effect of volume and whether differences between forecasts are market specific. Collapse

Semantic filters: sequential probability ratio test

Topics: logistics management

Methods: experiment statistical hypothesis test linear regression analysis regression analysis method machine learning

Theories: prospect theory

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