Prediction markets: information procurement from selfish agents in standard use cases

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As companies grow and work environments become more dispersed, managing and gathering information at a company level becomes a growing problem. Prediction markets are one way to aggregate information in these settings. Prediction markets are an information aggregation tool in which people trade in securities with values contingent on the outcome of a future event. For example, "Will project A be complete by the 31st of December?" could be one such security. A trader holding a "Yes" share stands to earn $1 if project A is completed by the 31st of December, otherwise she earns nothing. Prediction markets are analytically known to aggregate information in settings that do not always exist in practice. We examine the viability of prediction markets in more realistic settings. In cases where current prediction markets do not aggregate information, we look for new types of prediction markets that do aggregate information. In carrying out this research we propose new analytical methods for examining prediction markets and other forms of information aggregation. The results of this study can help Canadian businesses better aggregate information within their organization.