Prediction Markets & Information Aggregation
ActivePrediction markets are among the most powerful mechanisms for aggregating dispersed knowledge into actionable signals. We study their theoretical foundations, empirical performance, design constraints, and applications to institutional decision-making.
Key Questions
- How do prediction markets aggregate dispersed private information, and what are their fundamental limits?
- Can prediction markets improve public policy decisions and institutional forecasting?
- What market microstructure designs maximize information revelation?
- How do prediction markets compare to expert judgment and statistical models?
Connection to LucidiTao
Grounded in EP3 (Relation) and EP4 (Structure): markets are relational systems that reveal structural patterns in collective knowledge.