Prediction markets World Cup

Author: Stefan Luckner, Jan Schröder, and Christian Slamka

Organisation: Springer-Verlag Berlin Heidelberg

Publish Date: 2007

Country: Spain

Sector: Social Development

Method: Forecasting

Theme: Futures

Type: Article

Language: English

Tags: Prediction Markets, Forecast Accuracy, Sports Forecasting

Accurate forecasts are essential in many areas such as business and sports forecasting. Prediction markets are a promising approach for forecasting future events and are increasingly used to aggregate information on particular future events of interest such as elections, sports events, and Oscar winners. In this paper, we present the results of an empirical study that compares the forecast accuracy of a prediction market for the FIFA World Cup 2006 to predictions derived from the FIFA world ranking and to a random predictor. We find that prediction markets for the FIFA World Cup outperform predictions based on the FIFA world ranking as well as the random predictor in terms of forecast accuracy.

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