Accurate forecasts are of tremendous value for businesses and organizations. Prediction markets are a promising new forecasting mechanism that collect and aggregate information in a group of people. If prediction markets are to improve management information they need to outperform traditional forecasting methods such as surveys. However, there is little empirical evidence of their accuracy in comparison to forecasting methods such as surveys. This article compares the prediction performance of a prediction market and an independent Web-based survey for the FIFA World Cup 2006. The survey is a large scale guessing contest with roughly 220,000 participants. Our data sets include forecasts for the winner of each of the 64 World Cup matches as well as for the number of goals scored in each match. As we show, the prediction market outperformed the survey contest for both predictions, the number of goals scored in a match as well as the match winner.
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- Capturing Public Knowledge to Forecast Future Events
- Springer Berlin Heidelberg