Professor Michael Abramowicz, my colleague at GW Law School, has just published a new book, Predictocracy: Market Mechanisms for Public and Private Decision Making (Yale University Press 2008). From the book jacket:
Predicting the future is serious business for virtually all public and private institutions, for they must often make important decisions based on such predictions. This visionary book explores how institutions from legislatures to corporations might improve their predictions and arrive at better decisions by means of prediction markets, a promising new tool with virtually unlimited potential applications.
Michael Abramowicz explains how prediction markets work; why they accurately forecast elections, sports contests, and other events; and how they may even advance the ideals of our system of republican government. He also explores the ways in which prediction markets address common problems related to institutional decision making. Throughout the book the author extends current thinking about prediction markets and offers imaginative proposals for their use in an array of settings and situations.
Michael guest blogged here last year, and his work is always interesting and thought-provoking. Professor Ian Ayres (Yale Law School) writes about Michael’s Predictocracy:
Will Hillary or Arnold ever be elected? Will Die Hard VIII be a hit? Will the HP merger go through? Will Sanjaya be voted off this week? Our best evidence on all these questions increasingly comes from prediction markets. We already live in a world where orange juice future prices can usefully supplement the best government weather predictions. But Predictocracy shows that we’re just scratching the surface of what can be done with this powerful tool. Abramowicz’s inventive mind shows new ways to design prediction markets and radically new domains to predict. In this new world, peer reviewed journals, legal restatements, even deliberative democracy may ultimately be guided by the force of predictive bets.
Anything Michael writes is well-worth reading, and I predict that this book will be too (pardon the pun). It is a book I’ll definitely be adding to my shelf.