Partition-dependent Framing Effects in Lab and Field Prediction Markets *

@inproceedings{Sonnemann2008PartitiondependentFE,
  title={Partition-dependent Framing Effects in Lab and Field Prediction Markets *},
  author={Ulrich Sonnemann and Colin F. Camerer and Craig and R. and Fox and Thomas Langer and Many},
  year={2008}
}
Many psychology experiments show that individually judged probabilities of the same event can vary depending on the partition of the state space (a framing effect called "partitiondependence"). We show that these biases transfer to competitive prediction markets in which multiple informed traders are provided economic incentives to bet on their beliefs about events. We report results of a short controlled lab study, a longer field experiment (betting on the NBA playoffs and the FIFA World Cup… CONTINUE READING

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