Reg-Markets Center

Policy Markets

The Reg-Markets Center's "Policy Markets" web site provides resources for those interested in information markets. These markets--also known as event, prediction or decision markets--allow buyers and sellers to buy and sell contracts based on their expectations regarding the outcome of an uncertain future event. Examples of such events include the outcome of a presidential election, the price of an initial public offering, and the expected sales revenues from a product. Information markets have proved more prescient than experts' estimates in a variety of circumstances.

Because information markets have the potential to anticipate the consequences of choices, they could revolutionize the way the government, the non-profit world, and the private sector make decisions. They could also promote greater transparency and accountability in decision making.

Policy Markets Features

Tetlock and Hahn Analyze Optimal Liquidity for Decision Makers

AEI-Brookings Joint Center Book Examines the Potential of Information Markets

Policy Markets Gets a Nod in Chris Masse's Annual Prediction Markets Awards

Time Magazine Features Joint Center Work on Information Markets

Hahn and Tetlock Explain How Information Markets Can Improve Policy

Tim Harford Discusses Hahn and Tetlock's Info Market Approach to Development

Tradesports Traders Predict Which Party Will Control Congress After the Midterms

Research

Partisan Impacts on the Economy: Evidence from Prediction Markets and Close Elections, Erik Snowberg, Justin Wolfers, and Eric Zitzewitz. 2007. Quarterly Journal of Economics. Forthcoming, May.

Insider Trading and Prediction Markets, Robin Hanson. 2007. Journal of Law, Economics, and Policy. Forthcoming.

Information Aggregation and Manipulation in an Experimental Market, Robin Hanson, Ryan Oprea, and David Porter. 2006. Journal of Economic Behavior and Organization 60(4):449-459, August.

Designing Real Terrorism Futures, Robin Hanson. 2006. Public Choice 128(1-2):257-274, July.

Does Liquidity Affect Securities Market Efficiency?, Paul Tetlock. 2006. AEI-Brookings Joint Center Working Paper 06-24. Nov.

Decision Markets for Policy Advice, Robin Hanson. 2006. In Alan S. Gerber and Eric M. Patashnik, eds., Promoting the General Welfare: New Perspectives on Government Performance, 151-173, Brookings Institution Press. November(forthcoming).

Interpreting Prediction Market Prices as Probabilities, Justin Wolfers and Eric Zitzewitz. 2006. CEPR Discussion Paper No. 5676. May.

Macroeconomic Derivatives: An Initial Analysis of Market-Based Macro Forecasts, Uncertainty, and Risk, Refet Gürkaynak and Justin Wolfers. 2006. NBER Working Paper No. 11929. Jan.

Big Ideas: The Market's Last Frontier, Robert W. Hahn, Paul C. Tetlock. 2005. AEI-Brookings Joint Center for Regulatory Studies. Related Publication. February.

A New Approach for Regulating Information Markets, Robert W. Hahn, Paul C. Tetlock. 2004. AEI-Brookings Joint Center for Regulatory Studies. Regulatory Analysis. December.

Experimental Political Betting Markets and the 2004 Election, Justin Wolfers, Eric Zitzewitz. 2004. AEI-Brookings Joint Center for Regulatory Studies. Related Publication. October.

Harnessing the Power of Information: A New Approach to Economic Development, Robert W. Hahn, Paul C. Tetlock. 2004. AEI-Brookings Joint Center for Regulatory Studies. Working Paper. September.

Group Judgments: Deliberations, Statistical Means, and Information Markets.
Cass R. Sunstein. 2004. AEI-Brookings Joint Center for Regulatory Studies. Working Paper. September.

Using Information Markets to Improve Policy.
Robert Hahn. 2004. AEI-Brookings Joint Center for Regulatory Studies. Working Paper. September.

How Information Markets Could Change the Policy World.
Robert W. Hahn, Paul C. Tetlock. 2004. AEI-Brookings Joint Center for Regulatory Studies. Related Publication. August.

Manipulators Increase Information Market Accuracy.
Robin Hanson and Ryan Oprea. 2004. July.

Historical Presidential Betting Markets.

Paul W. Rhode and Koleman S. Strumpf. 2004. Journal of Economic Perspectives 18, 2: 127-142.

Prediction Markets.
Justin Wolfers, Eric Zitzewitz. 2004. Journal of Economic Perspectives 18, 2: 107-126.

Prediction Markets as Decision Support Systems.
J.E. Berg & T.A. Rietz. 2003.
Information Systems Frontiers 5, 1: 79-93.

Shall We Vote on Values, but Bet on Beliefs?
Robin Hanson. 2003.

Internet-Based Virtual Stock Markets for Business Forecasting.
Martin Spann and Bernd Skiera. Management Science 49(10): 1310-1326. 2003.

Results from a Dozen Years of Election Futures Markets Research.

Joyce Berg, Forrest Nelson, Robert Forsythe, and Thomas Rietz. 2003. March.

Information Markets, Administrative Decisionmaking, and Predictive Cost-Benefit Analysis.
Michael Abramowicz. AEI-Brookings Joint Center for Regulatory Studies. Related Publication 03-18. Aug 2003.

Extracting Collective Probabilistic Forecasts from Web Games.

David Pennock, C. Lee Giles, Finn Nielsen, and Steve Lawrence. 2001.

The Real Power of Artificial Markets.
D. M. Pennock, C. Giles, & F. Nielsen. 2001. Science 291: 987-988.

Markets as Information Gathering Tools.

C. R. Plott. 2000. Southern Economic Journal 67, 1: 2-15.

Wishes, Expectations and Actions: A Survey on Price Formation in Election Stock Markets.

R. Forsythe, T.A. Rietz, & T. W. Ross. 1999. The Journal of Economic Behavior and Organization 39, 1: 83-110.

Decision Markets.

R. Hanson. 1999. IEEE Intelligent Systems 14, 3: 16-19.

Experiences with the Foresight Exchange.

K. Kittlitz. 1999. Extropy Online.

Information Aggregation in Experimental Asset Markets: Traps and Misalligned Beliefs.

M. Noeth, C. F. Camerer, C. R. Plott, & M. Webber. 1999. Tech. rep. 1060, California Institute of Technology.

Prediction markets and information aggregation mechanism: Experiments and application.

K.-Y. Chen & C.R. Plott. 1998. Tech. rep., California Institute of Technology.

Forecasting Markets - An Industrial Application.
G. Ortner. 1998. Tech. rep., University of Technology Vienna.

Gambling for the Good, Trading for the Future: The Legality of Markets in Science Claims.

T. Bell. 2002. Chapman Law Review 5, 159: 159-180.

Comparing Peer Review to Information Prizes - A Possible Economics Experiment.

R. Hanson. 1995a. Social Epistemology 9, 1: 49-55.

Could Gambling Save Science? Encouraging an Honest Consensus.

R. Hanson. 1995b. Social Epistemology 9, 1: 3-33.

Anatomy of an Experimental Political Stock Market.
R. Forsythe, F. Nelson, G.R. Neumann. 1992. American Economic Review 82, 5: 1142-1161

Information Aggregation in an Experimental Market.

R. Forsythe & R. Lundholm. 1990. Econometrica 58 , 2: 309-347.

Futures Markets: Their Purpose, Their History, Their Growth, Their Successes and Failures.

D. W. Carlton. 1984. The Journal of Futures Markets 4, 3: 237-271.

Subjective Information and Market Efficiency in a Betting Market.

S. Figlewski. 1979. Journal of Political Economy 87, 1: 75-88.

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Review Articles and Opinions

When gambling is good. Robert Hahn and Paul Tetlcok. 2007. As printed in The Wall Street Journal. May 11.

Futures market created for bird flu. Mike Strobe. 2007. Associated Press. March 1.

Short odds for ignorance. Robert Hahn and Paul Tetlock. 2006. As printed in The New York Times. October 9.

Now you, too, can predict hurricanes. Anton Caputo. 2006. San Antonio Express News. September 4.

Event Markets Evolve: legal certainty needed. Paul Architzel. 2006. Futures Industry. March/April.

Architzel on Legality of Prediction Markets. Tom W. Bell. 2006. Agoraphilia. March 29.

Here's an Idea: Let Everyone Have Ideas. William C. Taylor. 2006. New York Times. March 26.

Why Don't More Businesses Use Prediction Markets?. Tyler Cowen. 2006. Marginal Revolution. March 15.

Market, Market, on the Wall. 2005. The Economist. December 8.

Making Development Work. Tim Harford. 2005. Private Sector Development Blog. November 9.

A Punter's Guide to the Pandemic. Peter Martin. 2005. Sydney Morning Herald. November 2.

Market Magic. Alix Nyberg Stuart. 2005. CFO Magazine. November 1.

Place Your Bets!. Bill Saporito. 2005. Time Magazine. October 16.

Putting Crowd Wisdom to Work. Bo Cowgill. 2005. Google Blog. September 21.

Prediction Markets. Cass Sunstein. 2005. Lessig Blog. July 20.

Guessing Games. 2004. The Economist. November 18.

Bookies seen outbidding election polls. Roland Jones. 2004. MSNBC Interactive. October 22.

Firm Offers Hedging on a Small Scale. Daniel Nasaw, Ian McDonald. 2004. Wall Street Journal. October 22.

Prediction Markets Have Arrived! Alex Tabarrok. 2004. Marginal Revolution. October 19.

All Seeing All Knowing: Futures markets can help identify successful products, predict revenues, and even forecast whether Bush or Kerry will win in November.
James M. Pethokoukis. 2004. USNews.com. August 30.

Opinion Market. James Hall. 2004. Financial Review BOSS. August.

Idea Futures Inside the Corporation. Tyler Cowen. 2004. Marginal Revolution. July 7.

The End of Management? B. Kiviat. 2004. Time. July 6.

Mobbed Up. Cass R. Sunstein. 2004. The New Republic. June 17.

Smarter than the CEO. J. Surowiecki. 2004. Wired. June 1.

You Can Bet on Idea Markets. A. Kambil. 2003. Harvard Business Online. December 1.

Can Markets Be Used to Help People Make Nonmarket Decisions? H. Varian. 2003. The New York Times. May 5.

Decisions, Decisions. J. Surowiecki. 2003. The New Yorker. March 17.

Congress Shorts Future Terror-Fighting Innovation.
Scott Wallsten. AEI-Brookings Joint Center for Regulatory Studies. Policy Matters 03-22. Jul 2003.

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