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Who are the winners of Eurovision?
● Polls● Expert opinions● Statistical models
● „You mean who I'd like to win?“● Insincere disclosure● Incomplete information
Prediction markets
● Stocks are tied to events● Stock payouts depend on the outcomes● Stock prices correlate with the probabilities
Prediction markets
The benefit? Accuracy!
Iowa Electronic Markets: 2008 US President election
Democrats
Republicans
Prediction markets
Why?● „Wisdom of the crowds“ (J.Surowiecki)● Incentives for information discovery and truthful revelation of beliefs● Efficient market hypothesis
Stocky
Demokratai
Respublikonai
Why facebook?
A channel for:● User acquisition● User activation● User retention● User referrals
High trading volumes and thus a large user base is necessary for forecasting accuracy.
What's next?
● More markets● Geo and social market recommendations● Paid markets● Growth
Thank you
