Aggregation and Manipulation in Prediction Markets: Effects of Trading Mechanism and Information Distribution Extended Abstract

摘要

We conduct laboratory experiments on variants of market scoring rule prediction markets, under different information distribution patterns, in order to evaluate the efficiency and speed of information aggregation, as well as test recent theoretical results on manipulative behavior by traders. We find that markets structured to have a fixed sequence of trades exhibit greater accuracy of information aggregation than the typical form that has unstructured trades. Prior theoretical predictions of differing strategic behavior under complementary information distributions and substitute information distributions are confirmed when the trading order is structured, but not in markets with an unstructured trading order. In the case of the markets with a structured order, we find that the information aggregation is consequently slower when information is complementary, as traders more frequently engage in bluffing and delaying strategies. In comparing two commonly used mechanisms, we find no significant difference between the performance of the direct probability-report form and the indirect security-trading form of the market scoring rule.