here is my opinions on the questions asked on the most recent slide presentation on prediction markets.

1. Briefly describe the prediction market.
These are speculative markets used to make predictions. People in prediction markets buy in, or make bets, on an event. Keeping track of the market and its developing prices can be interpreted as the predicted probability of the event in question.


2. The pros and cons of using prediction markets compared to the traditional group meeting.
Pros: I think the main advantage of prediction markets is that the results are made by the people who make up the market in question. I don’t think many people who don’t know anything about baseball will bet on the World Series. Also the people in the market are very diverse which makes the bets cover all aspects of the participants. If you are predicting how the public will react to or act on a subject, scientists and sociologists may have studied how people may think but may not be as accurate as the public itself.


3. How the prediction produced by the market reflects “the wisdom of crowds”.
The prediction produced by prediction markets reflects “the wisdom of crowds” because it operates on the same principles, that a larger crowd is a better predictor than a smaller one. It incorporates the diversity, and collective knowledge of the group as a whole.