Prediction Markets as a Mechanism for Public Engagement?

T07 4

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  • Title: Prediction Markets as a Mechanism for Public Engagement?: A First Classification and Open Questions
  • Author(s): Andreas Graefe, Carsten Orwat
  • Publisher: Common Ground Research Networks
  • Collection: Common Ground Research Networks
  • Series: Technology, Knowledge & Society
  • Journal Title: The International Journal of Technology, Knowledge, and Society
  • Keywords: Prediction Markets, Public Engagement, Participation, Forecasting, Foresight, Information Markets
  • Volume: 3
  • Issue: 4
  • Year: 2007
  • ISSN: 1832-3669 (Print)
  • DOI: https://doi.org/10.18848/1832-3669/CGP/v03i04/55766
  • Citation: Graefe, Andreas, and Carsten Orwat. 2007. "Prediction Markets as a Mechanism for Public Engagement?: A First Classification and Open Questions." The International Journal of Technology, Knowledge, and Society 3 (4): 137-142. doi:10.18848/1832-3669/CGP/v03i04/55766.
  • Extent: 6 pages

Abstract

Prediction markets are becoming increasingly popular because of their astounding performance in terms of forecasting or decision-making. In particular, they enable arbitrarily composed groups of people to accurately predict future events by buying and selling virtual stocks that represent a bet on the outcome of those events. These predictions are often more accurate than traditional opinion polls or judgments of individual experts. This is especially interesting for activities of public engagement, which usually call for a preferably broad involvement of participants in order to improve the reliability and acceptability of public decisions. The present paper describes the general concept of prediction markets and introduces the method to the field of public engagement. In particular, an existing typology is adopted for the classification of prediction markets among public engagement mechanisms. We find out that prediction markets enable a new and unique type of public engagement mechanisms, which provides answers to specific questions by aggregating information from preferably large, arbitrarily composed samples in a structured manner. Yet, further research is needed to evaluate and establish prediction markets in the field of public engagement.