The advantages of prediction markets include:
A) the ability of predicted outcomes to always beat actual outcomes in markets.
B) the fact that such markets encourage sales teams and traders at firms to divulge the true information on expected outcomes.
C) the fact that such markets are only useful at forecasting political outcomes.
D) the ability for strong prediction markets to swing actual market outcomes toward the predicted outcome.

Question

Quizplus · Accepted Answer

Prediction markets encourage individuals to disclose their true beliefs about the likelihood of future events, which can lead to more accurate predictions. This can be beneficial for sales teams and traders at firms who rely on accurate information for decision making. The other options are incorrect as predicted outcomes may not always beat actual outcomes in markets, prediction markets can be useful for forecasting outcomes beyond political events, and strong prediction markets may not necessarily swing actual market outcomes towards the predicted outcome.

The Advantages of Prediction Markets Include