Many psychology experiments show that individually judged probabilities of the same event can vary depending on the partition of the state space (a framing effect called partition-dependence). We show that these biases transfer to competitive prediction markets in which multiple informed traders...

In most games, for equilibrium to result, players need to forecast the equilibrium strategies of others. We elicit forecasts of outcomes in a series of hawk-dove (aka chicken) games played by other players. We ask whether these forecasts are consistent with any correlated equilibrium of a class...

This paper analyzes the accuracy of GDP growth forecasts prepared by the EBRD for 25 transition countries between 1994 and 2004. It finds that EBRD forecasts are mostly unbiased and efficient, and that forecast accuracy has improved as transition has progressed and as the range of data sources...

Prediction market prices are often used as estimates of the probability of outcomes in future elections and referendums. I argue that this practice is often flawed, and I develop a model that empiricists can use to partially identify probabilities from prediction market prices. In the special...

This paper studies how algorithms use variables to maximize predictive power at the cost of group equity. Group inequity arises if variables enlarge disparities in risk scores across groups. I develop a framework to examine a recidivism risk assessment tool using risk score and novel pretrial...

The purpose of this study is to explore a model in which asset prices are endogenously determined by information acquisition when investors have different prediction abilities. The authors discuss how equilibrium price and investor's demand for information are affected by investors' risk...

We estimate a structural model of herding behavior in which feedback arises due to mutual concerns of traders over the unobservable "true" level of market liquidity. In a herding regime, random shocks are exacerbated by endogenous feedback, producing a dampened power-law in the fluctuation of...

We estimate a structural model of herding behavior in which feedback arises due to mutual concerns of traders over the unobservable "true" level of market liquidity. In a herding regime, random shocks are exacerbated by endogenous feedback, producing a dampened power-law in the fluctuation of...

This paper investigates opportunities and approaches for forecasting the future, with a particular focus on Nobel prizes. We review different approaches, including using the “wisdom of the crowd” through approaches such as prediction markets. We drill down on prediction markets, analyzing...

Through the difference-in-differences (DID) methodology, we find that the connection of China’s high-speed railway (HSR) as an exogenous shock could improve analysts’ forecast performance, leading to more accurate forecasts, decrease the dispersion between analysts, stimulate more forecast...