Why prediction markets beat the experts

von Gloriaunhinged: Finance

Want a crowd to actually nail a forecast? Give them skin in the game. Prediction markets work because wagering cash on an outcome makes people dig in and do the homework instead of guessing. That incentive is the whole engine. Stack up enough of those informed bets and the group's call can hang with the experts. Crowd wisdom is real power when the stakes force everybody to think straight.