Markets

My father found this Global Risks Prediction Market. I have heard of using a market to make forecasts before, particularly the Iowa Electronic Market. The Iowa market, supposedly, is more accurate in predicting election outcomes (eg.) than all the polls that you see in the news. (I don't know if that is true.)

I believe that if people are risking real money, the market will tend towards a valid prediction. If the preceeding is a fair statement, I wonder how accurate a market will be which only uses fake money and no risk as the Global Risks Market does.

Also, I wonder how important the phrasing of the market's question must be. One of the featured questions on the Global Risks Market home page is "How many severe weather events will occur in 2006?" I have a hard time seeing that today's answer is anything more than a guess by any individual. Contrast that to, "Who will win the 2006 Ga. Governor's Race?"

I don't really know anything about economics though. It might be interesting to join the Global Risks Market and observe.