Delving deeper into prediction markets

Michael Abramowicz of George Washington University has been guest blogging at Volokh Conspiracy for a short time now, and he has given us much food for thought on the topic of prediction markets. There is easily enough material for an entire book, and unsurprisingly, he has written one (that is now on our must read stack); as well as his own blog site. The Volokh post series has been:

• An Intro to Prediction Markets and the Liquidity Problem

• Prediction Markets vs. Conventional Wisdom

• A Quick-and-Dirty Empirical Defense of Prediction Markets

• Manipulation of Prediction Markets

• Deliberating with Prediction Markets

• Predicting Decisions and Their Effects

• Normative Prediction Markets

• Why Normative Markets?

• Nineteenth-century prediction markets

We will no doubt have more to say on the topic ourselves in good order. However, it is a subject that deserves deeper reflection, especially given our acknowledged skepticism of such efforts – and our general distaste for attempts seeking to create artificial numeric precision.

Nonetheless, we are quite grateful to the author for his work, which offers a unique contribution to the literature in an area of great interest to the IC. Whatever one may think of the technique, it is worth exploring with the same rigour as any new methodology.