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 towards the predicted outcome.

Question

Quizplus · Accepted Answer

Prediction markets incentivize people to share their private knowledge and opinions about an outcome, which can lead to a more accurate prediction. This is especially important in business settings where it can help guide decisions and improve performance. Options A, C, and D are either untrue or do not accurately capture the advantages of prediction markets.

The Advantages of Prediction Markets Include