Crowdsourced outcome determination in prediction markets

Rupert Freeman, Sébastien Lahaie, David M. Pennock

Research output: Contribution to conferencePaperpeer-review

8 Scopus citations

Abstract

A prediction market is a useful means of aggregating information about a future event. To function, the market needs a trusted entity who will verify the true outcome in the end. Motivated by the recent introduction of decentralized prediction markets, we introduce a mechanism that allows for the outcome to be determined by the votes of a group of arbiters who may themselves hold stakes in the market. Despite the potential conflict of interest, we derive conditions under which we can incentivize arbiters to vote truthfully by using funds raised from market fees to implement a peer prediction mechanism. Finally, we investigate what parameter values could be used in a real-world implementation of our mechanism.

Original languageEnglish (US)
Pages523-529
Number of pages7
StatePublished - 2017
Externally publishedYes
Event31st AAAI Conference on Artificial Intelligence, AAAI 2017 - San Francisco, United States
Duration: Feb 4 2017Feb 10 2017

Other

Other31st AAAI Conference on Artificial Intelligence, AAAI 2017
Country/TerritoryUnited States
CitySan Francisco
Period2/4/172/10/17

All Science Journal Classification (ASJC) codes

  • Artificial Intelligence

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