A Short Prediction Market Primer

What is a prediction market?

A speculative market used to make predictions of possible outcomes.

Fictional assets represent alternative outcomes or values of some parameter:
- when will a permanent human settlement on Mars be established? 2015, 2020, “before 2025”, etc.
Assets bought, sold, shorted, etc. with real or fictional currency
Traders are execs, project managers, rank-and-file
Market prices of assets “interpreted as predictions of the probability of the event or expected value of the parameter” (Wikipedia)
Primary utility is as a decision support tool

NASA management must often determine which of several competing goals to pursue:
- Return to Moon? Settlement on Mars? New engine technology?
PM technology can provide input into decision process
PMs democratize the valuation process in an organization, like real markets
Google, Yahoo Research, HP, Microsoft, etc using PMs internally or building PMs into other tech
Applicable to anything that can be mapped to a probability function (risk management, aggregate valuations, etc)

DC-based R&D firm specializing in Semantic Web, web services, and advanced AI technologies for federal and enterprise customers.