Prediction Markets as a Decision Support Tool

A project to explore extending electronic prediction markets for use as a decision aid tool. Investigation focuses on issues of a military interest but has broader implications. Issues explored include methods to identify suitable issues, relevantevents, screen events for suitability for electronic markets, identification of market participants, and identification of appropriate incentives. Related issues of legality, acceptance, regulatory restrictions, and adjunct decision making benefits arealso explored. Test markets are designed and demonstrations planned. Improved accuracy of predictions resulting from aggregation of individual knowledgeable inputs, even when knowledge is of limited scope. Responsive nature of predictions offered tousers with minimum intrusion on responding individuals. Anonymity and potential for personal reward provides envrionment for honest response. Methodology offers improvements over surveys.