Anonymous <nobody@cryptofortress.com> writes:

I first ran into this market concept about ten years ago. The Iowa Political Stock Market successfully predicted the outcome of the 1992 U.S. presidential election within a few tenths of a percentage point for all three candidates (including Perot). It was more accurate than 8 major polls. Since then there have been many other experiments with other markets: Hollywood Stock Exchange where people bet on future box office receipts and Foresight Exchange where traders bet on the outcomes of unresolved scientific and societal questions.

It's been used in other areas as well, and for rather longer than ten years. For example, one of the most accurate estimates of the entropy of natural language involved people placing bets on the value of the next letter seen (as opposed to the more traditional "I guess it'll be an 'e'" estimation technique). Peter.