Prediction Markets: From Politics to Business (and Back)

Abstract

Prediction markets are the subject of a growing body of scholarly literature, and growing attention from the business community. These recent trends are often discussed without reference to the long history of these markets. Prediction markets started as simple wagers on political contests and have expanded through laboratory and field experiments. We survey this history, detailing the past and current uses of prediction markets. We conclude by examining some potential challenges that will need to be addressed as the uses of prediction markets expand.

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