Prediction markets:
A) are speculative markets designed so that prices can be interpreted as probabilities and used to make predictions.
B) are not very reliable sources of information.
C) incentivize random guessing about the future.
D) are widely subsidized by the government to improve information-gathering.

Question

Quizplus · Accepted Answer

Prediction markets are designed to allow individuals to buy and sell contracts based on the outcome of future events. As people trade these contracts, prices can be interpreted as probabilities and used to make predictions. Therefore, A is the correct choice. B, C, and D are incorrect.

Prediction Markets