Composition of markets with conflicting incentives

  title={Composition of markets with conflicting incentives},
  author={Stanko Dimitrov and Rahul Sami},
We study information revelation in scoring rule and prediction market mechanisms in settings in which traders have conflicting incentives due to opportunities to profit from the market operator's subsequent actions. In our canonical model, an agent Alice is offered an incentive-compatible scoring rule to reveal her beliefs about a future event, but can also profit from misleading another trader Bob about her information and then making money off Bob's error in a subsequent market. We show that… CONTINUE READING
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