scholarly journals Information Aggregation and Beliefs in Experimental Parimutuel Betting Markets

2007 ◽  
Author(s):  
Frédéric Koessler ◽  
Charles N. Noussair ◽  
Anthony Ziegelmeyer
Keyword(s):  
Information Aggregation ◽  
Betting Markets ◽  
Parimutuel Betting

scholarly journals Parimutuel betting markets as information aggregation devices: experimental results

2003 ◽  
Vol 22 (2) ◽  
pp. 311-351 ◽  
Author(s):  
Charles R. Plott ◽  
Jorgen Wit ◽  
Winston C. Yang
Keyword(s):  
Information Aggregation ◽  
Experimental Results ◽  
Betting Markets ◽  
Parimutuel Betting

Anomalies: Parimutuel Betting Markets: Racetracks and Lotteries

1988 ◽  
Vol 2 (2) ◽  
pp. 161-174 ◽  
Author(s):  
Richard H Thaler ◽  
William T Ziemba
Keyword(s):  
Stock Market ◽  
Market Efficiency ◽  
Empirical Research ◽  
Stock Markets ◽  
Cash Flows ◽  
Present Value ◽  
Betting Markets ◽  
Future Cash Flows ◽  
Termination Point ◽  
Parimutuel Betting

Economists have given great attention to stock markets in their efforts to test the concepts of market efficiency and rationality. Yet wagering markets are, in one key respect, better suited for testing market efficiency and rationality. The advantage of wagering markets is that each asset (bet) has a well-defined termination point at which its value becomes certain. The absence of this property is one of the factors that has made it so difficult to test for rationality in the stock market. Since a stock is infinitely lived, its value today depends both on the present value of future cash flows and on the price someone will pay for the security tomorrow. Indeed, one can argue that wagering markets have a better chance of being efficient because the conditions (quick, repeated feedback) are those which usually facilitate learning. However, empirical research has uncovered several interesting anomalies. While there are numerous types of wagering markets, legal and otherwise, this column will concentrate on racetrack betting and lotto-type lottery games.

scholarly journals LOGARITHMIC MARKETS CORING RULES FOR MODULAR COMBINATORIAL INFORMATION AGGREGATION

2012 ◽  
Vol 1 (1) ◽  
pp. 3-15 ◽  
Author(s):  
Robin Hanson
Keyword(s):  
Conditional Independence ◽  
Information Aggregation ◽  
Scoring Rules ◽  
Conditional Probabilities ◽  
Probability Estimates ◽  
Or Groups ◽  
Betting Markets ◽  
The Given ◽  
Independence Relations

In practice, scoring rules elicit good probability estimates from individuals, while betting markets elicit good consensus estimates from groups. Market scoring rules combine these features, eliciting estimates from individuals or groups, with groups costing no more than individuals. Regarding a bet on one event given another event, only logarithmic versions preserve the probability of the given event. Logarithmic versions also preserve the conditional probabilities of other events, and so preserve conditional independence relations. Given logarithmic rules that elicit relative probabilities of base event pairs, it costs no more to elicit estimates on all combinations of these base events.

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