Lonely Lion

The paper I mentioned last week was published. It’s a pretty interesting read. I’ve only skimmed it, but I did find the bits I was interested in, how does the market work? They pick questions with 4-5 possible answers, like “how many gmail users will there be a) 1 million b) 2 million…” and run it for a quarter. At the end of the quarter, the securities pay out. Which backs up my belief that in order to be successful, a prediction market needs a feedback loop. It can’t just be abstract, there has to be an outcome for each security.