Backgrounder on prediction markets

The latest issue of Scientific American has an article on prediction markets. Those who know the literature won’t learn that much from it, but it does have a neat history on the Iowa Electronic Markets. My favourite quote:

When the three academics—George R. Neumann, Robert Forsythe and Forrest Nelson—sought support from the university, the dean of its business college, a free-market advocate, could not contain his enthusiasm. On the other hand, the dean of the college of arts and sciences, a political scientist, characterized the proposal as “the stupidest thing he had ever heard of,” Neumann recalls. “At best, it would be a shadow of the polls,” he was told.

(HT: Sacha Blumen) 

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One Response to Backgrounder on prediction markets

  1. Dave Bath says:

    Long Bets is a much more interesting prediction market – if only because each side of the bet (click on the bet of interest) contains some fairly detailed arguments, the “gamblers” are generally well known, and the subjects usually involve things that are much more important. The typical topics also make good topics for discussions over dinner tables and barbeques.

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