Prediction Markets 101 (video lecture)

These videos were filmed at an international workshop on “Principles and Mechanisms of Collective Wisdom” organized by the eminent philosopher Jon Elster at the Collège de France in Paris on May 22, 2008.

PART 1: EVIDENCE OF PREDICTION MARKET ACCURACY

PART 2: WHY PREDICTION MARKETS ARE ACCURATE

There followed a challenging Q&A session which is covered in the five next videos (one question and answer each).

Q&A 1: Aren’t political prediction markets just following the polls?

Q&A 2: Why did prediction markets fail to predict the lack of weapons of mass destruction in Irak?

Q&A 3: Would market predictions still be accurate if everyone believed them?

Q&A 4: Is Democracy ready for prediction markets?

Q&A 5: How can trading prices translate into probabilities if individual traders don’t trade accordingly?

In addition to Emile’s lecture on prediction markets, the workshop featured a rich variety of social science perspectives on the issue of collective intelligence, and all these lectures are viewable (in English) in high-quality streaming video. For the audience of this blog, I especially recommend the brilliant lecture by Scott Page on the power of diversity.

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