Book chapter
What Makes Markets Predict Well? Evidence from the Iowa Electronic Markets
Understanding Strategic Interaction, pp.444-463
Springer
1997
DOI: 10.1007/978-3-642-60495-9_34
Abstract
We use the data from the Iowa Electronic Markets to study factors associated with the ability of markets to predict future events. These are large-scale, real-money experimental markets with contract payoffs determined by political election outcomes. They provide data about individual trader characteristics and market micro-behavior which is not available from larger exchanges. In this study we find that market characteristics motivated by financial theory and previous experimental research account for most of the variance in predictive accuracy across sixteen markets. Three variables are particularly important: 1) the number of contract types traded, 2) pre-election market volumes and 3) differences in election eve (weighted) market bid and ask queues.
Details
- Title: Subtitle
- What Makes Markets Predict Well? Evidence from the Iowa Electronic Markets
- Creators
- Joyce Berg - University of IowaRobert Forsythe - University of IowaThomas Rietz - University of Iowa
- Contributors
- Wulf Albers (Editor)Werner Güth (Editor)Peter Hammerstein (Editor)Benny Moldovanu (Editor)Eric van Damme (Editor)
- Resource Type
- Book chapter
- Publication Details
- Understanding Strategic Interaction, pp.444-463
- DOI
- 10.1007/978-3-642-60495-9_34
- Publisher
- Springer; Berlin
- Number of pages
- 20
- Language
- English
- Date published
- 1997
- Academic Unit
- Economics; Accounting; Finance
- Record Identifier
- 9984963123302771
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