Call for Papers
Second Workshop on Prediction Markets
A prediction market is a financial market designed to elicit a forecast. For example, suppose a policymaker seeks a forecast of the likelihood of an avian flu outbreak in 2008. She may float a security paying $1 if and only if an outbreak actually occurs in 2008, hoping to attract traders willing to speculate on the outcome. With sufficient liquidity, traders will converge to a consensus price reflecting their collective information about the value of the security, which in this case directly corresponds to the probability of outbreak. Empirically, prediction markets often yield better forecasts than other methods across a diverse array of settings.
The past decade has seen a healthy growth in the field, including a sharp rise in publications and events, and the creation of the Journal of Prediction Markets. Academic work includes mechanism design, experimental (laboratory) studies, field studies, and empirical analyses. In industry, several companies including Eli Lilly, Corning, HP, Microsoft, and Google have piloted internal prediction markets. Other companies, including ConsensusPoint, InklingMarkets, NewsFutures, and TradeSports, base their business on providing public prediction markets, prediction market software solutions, or consulting services. The growth of the field is reflected and fueled by a wave of popular press articles and books on the topic, most prominently Surowiecki’s “The Wisdom of Crowds”.
The area of prediction markets faces challenges regarding how best to
design, deploy, analyze, and understand prediction markets. One
important research direction is designing mechanisms for prediction
markets, especially for events with a combinatorial outcome space.
Technical challenges in this direction include the thin market problem
and computational issues of order matching, among others. Another
notable issue is manipulation in prediction markets. Understanding the
effect of manipulation is especially important for prediction markets to
find their way to assist individuals and organizations in making
critical decisions.
Prediction markets face social and political obstacles including
antigambling laws and moral and ethical concerns, both real and
constructed.
Submissions from a rich set of empirical, experimental, and theoretical perspectives are invited. Topics of interest at the workshop include, but are not limited to:
- Mechanism design
- Game-theoretic analysis of mechanisms, behaviors, and dynamics
- Decision markets
- Combinatorial prediction markets
- Market makers for prediction markets
- Manipulation and prediction markets
- Order matching algorithms
- Computational issues of prediction markets
- Liquidity and thin markets
- Laboratory experiments
- Empirical analysis
- Prediction market modeling
- Industry and field experience
- Simulations
- Policy applications and implications
- Internal corporate applications
- Legal and ethical issues
Research contributions should report new (unpublished) research results or ongoing research. The workshop's proceedings can be considered non-archival, meaning contributors are free to publish their results later in archival journals or conferences. Research contributions may optionally use the double-column EC'07 proceedings format (http://stiet.si.umich.edu/ec07/formatting.html).
Position papers and panel discussion proposals are also welcome.
Papers should be submitted electronically to the organizing committee at pm07-organizers@yahoo-inc.com no later than midnight Hawaii time, March 30, 2007.
At least one author of each accepted paper will be expected to attend and present their findings at the workshop.
March 30, 2007: Submissions due midnight Hawaii Time
April 23, 2007: Notification of accepted papers
May 11, 2007: Final papers due
June 12, 2007: Workshop date