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Manipulation in Conditional Decision Markets

Titelangaben

Teschner, Florian ; Rothschild, David ; Gimpel, Henner:
Manipulation in Conditional Decision Markets.
In: Group Decision and Negotiation. Bd. 26 (2017) Heft 5 . - S. 953-971.
ISSN 1572-9907
DOI: https://doi.org/10.1007/s10726-017-9531-0

Volltext

Link zum Volltext (externe URL): Volltext

Abstract

Conditional decision markets concurrently predict the future and decide on it. These markets create a price for the impact of decisions, conditional on them being executed. After the markets close, a principal decides which decisions are executed based on the prices in the markets. As some decisions are not executed, the respective outcome cannot be observed, and the markets predicting the impact of non-executed decisions are void. This allows ex-post costless manipulation of such markets. We conduct two versions of an online experiment to explore scenarios in which a principal runs conditional decision markets to inform her choice among a set of risky alternatives. We find that the level of manipulation depends on the simplicity of the market setting. When a trader is alone, has the power to move prices far enough, and the decision is deterministically tied to market prices or a very high correlation between prices and decision is implied, only then manipulation occurs. As soon as another trader is present to add risk to manipulation, manipulation is eliminated. Our results contrast theoretical work on conditional decision markets in two ways: First, our results suggest that manipulation may not be as meaningful an issue. Second, probabilistic decision rules are used to add risk to manipulation; when manipulation is not a meaningful issue, deterministic decisions provide the better decision with less noise. To the best of our knowledge, this is the first experimental analysis isolating the effects of the conditional nature of decision markets.

Weitere Angaben

Publikationsform: Artikel in einer Zeitschrift
Begutachteter Beitrag: Ja
Keywords: Market Design; Market Manipulation; Conditional Markets; Prediction Markets; Decision Markets
Institutionen der Universität: Fakultäten > Rechts- und Wirtschaftswissenschaftliche Fakultät > Fachgruppe Betriebswirtschaftslehre
Forschungseinrichtungen
Forschungseinrichtungen > Institute in Verbindung mit der Universität
Forschungseinrichtungen > Institute in Verbindung mit der Universität > Projektgruppe Wirtschaftsinformatik der Fraunhofer FIT
Forschungseinrichtungen > Institute in Verbindung mit der Universität > FIM Kernkompetenzzentrum Finanz- & Informationsmanagement
Fakultäten
Fakultäten > Rechts- und Wirtschaftswissenschaftliche Fakultät
Titel an der UBT entstanden: Nein
Themengebiete aus DDC: 000 Informatik,Informationswissenschaft, allgemeine Werke > 004 Informatik
300 Sozialwissenschaften > 330 Wirtschaft
Eingestellt am: 09 Jan 2018 12:35
Letzte Änderung: 18 Jun 2018 05:36
URI: https://eref.uni-bayreuth.de/id/eprint/41568