Prediction Markets: Work Flow

The concept is based on a thesis by Professor Hayek an Austrian economist and Nobel Prize Winner. The theory is that prices are indicators of spread information.

This is also true for a virtual stock exchange where the price basically reflects the aggregated knowledge of all traders - the prediction.

  • The Registered User (Trader) trades on the virtual stock exchange with his virtual shares
  • At a certain due date the virtual value is compared with the real result ("reality check")
  • The relationship between offer and demand creates a price which shows the prognosis of all users in real time. Including future trends.
  • The winner is the user who anticipated the real development and benefited from the irrational estimation of the rest of the users (Thesis from Professor Hayek)
  • The social status in the community is the motivation factor