Prediction markets

Justin Wolfers of the University of Pennsylvania’s Wharton School talks to Romesh Vaitilingam about prediction markets – where they come from; their use in election campaigns and corporate decision-making; how well they perform compared with alternative ways of aggregating information (such as opinion polls or staff meetings); how they can best be designed; and prospects for their application to such areas as geopolitical risks and the spread of disease. The interview was recorded at the American Economic Association meetings in New Orleans in January 2008.