Likely that between the two, only prediction markets enable the possibility of encouraging real-world outcomes. On Mon, Dec 6, 2021, 4:19 AM grarpamp <grarpamp@gmail.com> wrote:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2660628
Distilling the Wisdom of Crowds: Prediction Markets versus Prediction Polls
Management Science, Early View, Forthcoming
37 Pages Posted: 15 Sep 2015 Last revised: 28 Nov 2017 Pavel D. Atanasov
Pytho LLC Phillip Rescober
Independent Eric Stone
Independent Samuel A. Swift
University of California, Berkeley - Institute of Business and Economic Research (IBER); Tepper School of Business Emile Servan-Schreiber
LUMENOGIC Philip Tetlock
University of Pennsylvania Lyle Ungar
University of Pennsylvania Barbara Mellers
University of California, Berkeley - Marketing Group; University of Pennsylvania - Marketing Department
Date Written: March 1, 2017 Abstract
We report the results of the first large-scale, long-term, experimental test between two crowd sourcing methods – prediction markets and prediction polls. More than 2,400 participants made forecasts on 261 events over two seasons of a geopolitical prediction tournament. Some forecasters traded in a continuous double auction market and were ranked based on earnings. Others submitted probability judgments, independently or in teams, and were ranked based on Brier scores. In both seasons of the tournament, last day prices from the prediction market were more accurate than the simple mean of forecasts from prediction polls. However, team prediction polls outperformed prediction markets when poll forecasts were aggregated with algorithms using temporal decay, performance weighting and recalibration. The biggest advantage of prediction polls occurred at the start of long-duration questions. Prediction polls with proper scoring, algorithmic aggregation and teaming offer an attractive alternative to prediction markets for distilling the wisdom of crowds.
Keywords: Prediction, Forecasting, Prediction Markets, Crowdsourcing
JEL Classification: C82, C93, D84
Suggested Citation: Atanasov, Pavel D. and Rescober, Phillip and Stone, Eric and Swift, Samuel A. and Servan-Schreiber, Emile and Tetlock, Philip and Ungar, Lyle and Mellers, Barbara, Distilling the Wisdom of Crowds: Prediction Markets versus Prediction Polls (March 1, 2017). Management Science, Early View, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2660628