Project description of the Economic Indicator eXchange
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README.md

README.md

EIX Market Project Documentation

Economic Indicator eXchange - A prediction market to forecast the German economy

Abstract

Macro-economic forecasts are used extensively in industry and government even though the historical accuracy and reliability is disputed. Modern information systems facilitate participatory, crowd-sourced processes that harness the collective intelligence. One instantiation of such wisdom of the crowds are prediction markets which have proven to successfully forecast the outcome of elections, sport events and product sales. The EIX is (was) a specifically designed prediction market for macro-economic variables in Germany. The market acts as a mechanism not only to aggregate dispersed information but also to aggregate individual forecasts. It does so by incentivizing participation and rewards early, precise forecasts. Moreover, the market-platform is yet alone in aggregating these forecasts continuously and for a long time horizon. Analyzing the market-generated forecasts, we find that forecast accuracy improves constantly over time and that generated forecasts performed well in comparison to the Bloomberg-survey forecasts. From an individual perspective, market participants interact in a repeated decision-making environment (continuous double auction) closely resembling decision-making in financial markets.

Duration

November 2009 - December 2013

Project Partner

  • Institut für Informationswirtschaft und Marketing (IISM)
  • Institut der deutschen Wirtschaft Köln (IW)
  • Handelsblatt GmbH

URLs

Impressions

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