About Information markets

Information and Prediction Markets are a relatively new concept that has been evolving in the past 10 years. Interest in Prediction Markets has increased, in the past few years, among public, private-sector market operators, policymakers and academics, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision making and risk management, in both the public and private sectors.

The success of corporate prediction markets in forecasting printer sales (Chen and Plott, 2002) and project management (Ortner, 2002), has stimulated interest in their application to other business problems as well. Several leading companies, as HP, Eli Lilly, BP Amoco, Intel and others, have already pioneered and made use of such markets. Prediction Markets deliver clear, accurate forecasts on almost any issue for corporations and media organizations. Some use them to predict sales, rank projects, monitor industry trends or customer satisfaction, others to mine the collective mind of their audience.

Such markets have been operating since the 90’ in both, real money and play money formats. One of the most famous platform is the IEM (operated by the Iowa university), which has been operating and predicting the results of American presidential elections with greater accuracy than polling companies.

Regardless of a platform profile, assets are created whose final value is tied to a particular event or parameter. The current market prices can then be interpreted as predictions of the probability of events to occur.

The data obtained from executed transactions is used for variable purposes such as: market research and consumer product analysis. The obtained information is used by corporate firms, financial institutions and also as original content to radio, television and print media.