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Predicorps experiences from our corporate prediction markets, confirm the general conclusions made in literature about the high accuracy of the delivered forecasts. More than 80% of the markets proved to be accurate.
Results from public markets show the same high accuracy. A good example is the prediction market forecasting results of the Swedish public referendum about joining the EU. Prediction market showed the highest accuracy compared to all other methods.
This market was created and run by the late member of the Predicorp Academic Board, professor Peter Bohm. From the very early moment the forecast pointed to the Yes as the winning claim.
The University of Iowa, covering presidential and other elections in the US and in several foreign countries, has developed political prediction markets. Correlation between forecasted and actual outcomes is very close to 1.
The literature on prediction markets presents several other examples of the high accuracy outcomes...
However there are several examples of failures.
The main reasons seems to be:
» Vaguely formulated tradable claims confusing insighters in their trade decisions
» Low liquidity on the markets due to low trade volumes or inadequate number of insighters
» Not enough insightful or motivated trader communities |
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