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dc.contributor.authorCoughlan, Peter
dc.contributor.authorArkes, Jeremy
dc.contributor.authorGates, William
dc.date03-Feb-11
dc.date.accessioned2013-05-08T21:21:58Z
dc.date.available2013-05-08T21:21:58Z
dc.date.issued2011-02-03
dc.identifier.urihttp://hdl.handle.net/10945/33590
dc.descriptionSponsored Report (for Acquisition Research Program)en_US
dc.description.abstractPrediction markets, sometimes called information markets, idea markets or event futures, are similar to financial stock markets where the stocks and their prices reflect the consensus view regarding the outcomes of specifically defined future probabilistic events. Prediction markets quickly and efficiently gather and summarize information from a disparate and diverse group of people, providing a two-way information flow; individual traders are informed by the consensus opinion and their market decisions inform the aggregate consensus. The remarkable accuracy of prediction markets in forecasting election results economic outcomes, and other variables has defense managers intrigued by the possibility of applying these markets as a managerial decision tool. Overall implementing prediction markets is straight forward, but in practice the devil is in the details, including security or contact design, trading rules, participation incentives and the number and characteristics of the traders. Small changes in any design element can significantly affect prediction market performance. This research highlights the implementation issues involved in designing and running prediction markets. If improperly designed, prediction markets will be confusing and uninformative, at best. Poorly designed early pilots can portray prediction markets as a flawed concept as opposed to a useful concept with a flawed implementation.en_US
dc.description.sponsorshipNaval Postgraduate School Acquisition Research Programen_US
dc.rightsApproved for public release, distribution unlimited.|T|his publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.|A|pproved for public release, distribution is unlimiteden_US
dc.titleInnovations in Defense Acquisition: Asymmetric Information, Mechanism Design and Prediction Marketsen_US
dc.typeReporten_US
dc.contributor.departmentGraduate School of Business & Public Policy (GSBPP)
dc.subject.authorPrediction Marketsen_US
dc.subject.authorPrediction markets, information aggregation, information markets, idea markets or event futuresen_US
dc.identifier.npsreportNPS-AM-11-006


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