Cited by 331Sports Analytics and PerformanceFinancial Markets and Investment StrategiesEconomic theories and models

Interpreting the predictions of prediction markets

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Manski, Charles F.·2006·Economics Letters

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Crossref · 10.1016/j.econlet.2006.01.004

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  • This type of contract can under some conditions be interpreted as the average predicted probability of the outcome occurring.

    “This type of contract can under some conditions be interpreted as the average predicted probability of the outcome occurring ( 27 , 63 ); see Sonneman et al ( 64 ) for lab evidence that averaged beliefs are close to prediction market prices.”

    From Evaluating replicability of laboratory experiments in economics (2016) · cites this paper as [63]

    The Discussion says that even under the paper’s maintained assumptions, a contract’s price does not equal traders’ mean belief. The Introduction says the price is instead the midpoint of an interval in which the mean belief may lie. Thus the paper does not support interpreting the price as the average predicted probability under those conditions. (LLM, conf=0.89)

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1 of the 4 references couldn’t be matched to a known paper.

Research works printed but not linked: 9

  1. Brown, L. and Y. Lin (2003), "Racetrack Betting and Consensus of Subjective Probabilities," Statistics and Probability Letters, 62, 175-187.
  2. Dominitz, J. and C. Manski (1997), "Perceptions of Economic Insecurity: Evidence from the Survey of Economic Expectations," Public Opinion Quarterly, 61, 261-287.
  3. Dominitz, J. and C. Manski (2004), "How Should We Measure Consumer Confidence?" Journal of Economic Perspectives, forthcoming.
  4. Eisenberg, E. And D. Gale (1959), "Consensus of Subjective Probabilities: The Pari-Mutuel Method," Annals of Mathematical Statistics, 30, 165-168.
  5. Grossman, S. (1976), "On the Efficiency of Competitive Stock Markets Where Trades Have Diverse Information," Journal of Finance, 31, 573-585.
  6. Hayek, F. (1945), "The Use of Knowledge in Society," American Economic Review, 35, 519-530.
  7. Hurd, M. and K. McGarry (1995), "Evaluation of the Subjective Probabilities of Survival in the Health and Retirement Study," Journal of Human Resources, 30, S268-S292.
  8. Manski, C. (1990), "The Use of Intentions Data to Predict Behavior: A Best Case Analysis," Journal of the American Statistical Association, 85, 934-940.
  9. Savage, L. (1971), "Elicitation of Personal Probabilities and Expectations," Journal of the American Statistical Association, 66, 783-801.

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Authors
Manski, C. F.
Affiliations
Northwestern University (US)
Corresponding author
Manski, Charles F.
Venue
Economics Letters
Publisher
Elsevier BV
Published
2006-06
Volume
91
Issue
3
Pages
425-429
ISSN
0165-1765 (ISSN-L)
OpenAlex
W2891132906
Cited by
330
References
4
Citations by year
2026: 34 · 2025: 9 · 2024: 7 · 2023: 8 · 2022: 18 · 2021: 13 · 2020: 14 · 2019: 10 · 2018: 10 · 2017: 5 · 2016: 17 · 2015: 22 · 2014: 21 · 2013: 19 · 2012: 27
FWCI
36.85
Type
journal article
Language
en
Open access
Locations
  • Economics Letters (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
National Science Foundation
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Sports Analytics and Performance
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
Keywords
prediction markets, futures markets, price formation, heterogeneous beliefs, equilibrium

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