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 academicsâ€”George R. Neumann, Robert Forsythe and Forrest Nelsonâ€”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 â€œthe stupidest thing he had ever heard of,â€ Neumann recalls. â€œAt best, it would be a shadow of the polls,â€ he was told.
(HT: Sacha Blumen)Â