Five Open Questions about Prediction Markets


Justin Wolfers

Eric Zitzewitz

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2006-06 | January 1, 2006

Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decisionmaking and risk management–in both the public and private sectors. This paper outlines five open questions in the literature, and we argue that resolving these questions is crucial to determining whether current optimism about prediction markets will be realized.

Article Citation

Zitzewitz, Eric, and Justin Wolfers. 2006. “Five Open Questions about Prediction Markets,” Federal Reserve Bank of San Francisco Working Paper 2006-06. Available at