• Corpus ID: 18688417

The Effects of Prediction Market Design and Price Elasticity on Trading Performance of Users: An Experimental Analysis

@article{Blohm2012TheEO,
  title={The Effects of Prediction Market Design and Price Elasticity on Trading Performance of Users: An Experimental Analysis},
  author={Ivo Blohm and Christoph Riedl and Johann F{\"u}ller and Orhan K{\"o}roglu and Jan Marco Leimeister and Helmut Krcmar},
  journal={ArXiv},
  year={2012},
  volume={abs/1204.3457}
}
We employ a 2x3 factorial experiment to study two central factors in the design of prediction markets (PMs) for idea evaluation: the overall design of the PM, and the elasticity of market prices set by a market maker. The results show that 'multi-market designs' on which each contract is traded on a separate PM lead to significantly higher trading performance than 'single-markets' that handle all contracts one on PM. Price elasticity has no direct effect on trading performance, but a… 

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