This week’s theme is prediction markets. We just had a quick overview of what prediction markets are during the lecture. Ms Li told us some applications like the American elections and gave us some information about is. So prediction markets seem to be very precise, but I pointed out two issues concerning prediction markets in my homework assignment.
The first issue is about market manipulation. Because prediction markets use the crowd, we should be aware of people that are willing to manipulate prediction markets in order to ensure that the outcomes of those markets will be as reliable as possible and can contribute to a good prediction of a certain event. The occasions where people tried to manipulate prediction markets didn’t work out that negative and it only caused a sort of a ‘hype’ or a ‘buzz’ but it actually didn’t influence the end prices significantly.
The second issue is about the prediction of influenza that pops up every year. Through a prediction market among health care workers (they sit front row in a terms of flu information). They can predict the intensity of the influenza because it is divided in phases that health care workers can indicate.
