What is a Prediction Market?
A prediction market is a futures market where participants buy and sell contracts representing the outcomes of binary events (i.e. Will Obama get the Democratic Nomination? Yes or No).
Prediction markets have been used for years to anticipate the outcomes of political races, box office returns, and sports events. Companies use prediction markets to measure employee confidence in project deadlines and anticipated success. Government agencies even considered using in-house markets to predict the time and place of the next terrorist attack.
Some prominent prediction markets include the University of Iowa's Iowa Electronic Market, Intrade.com, and The Hollywood Stock Exchange.
This website use current markets in a novel way to calculate specific values of the respective underlying securities. Initially, the Dow Jones Industrial Index and US Unemployment figures will be tracked. The month-end and year-end estimates of the Dow will be updated daily; the year-end estimate of US Unemployment will be updated weekly.
Some prediction markets:
Hollywood Stock Exchange - www.hsx.com
Inkling - home.inklingmarkets.com/
Intrade - www.intrade.com
Iowa Electronic Market - www.biz.uiowa.edu/iem/index.cfm
Information on prediction markets
Prediction Markets on Wikipedia - en.wikipedia.org/wiki/Prediction_market
Prediction Markets 101 - Part 1/2 (9:22) - www.youtube.com/watch?v=Ar2XDI9LDHw&feature=related
Prediction Markets 101 - Part 2/2 (8:45)- www.youtube.com/watch?v=SbZQHun_goc&NR=1
What is a Prediction Market? - www.youtube.com/watch?v=9_MXvopRqps
