Tiresias and the Justices: Using Information Markets to Predict Supreme Court Decisions

Article excerpt

"The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law."

-Oliver Wendell Holmes'

I. INTRODUCTION TO INFORMATION MARKETS ....................1143

A. Harnessing Group Knowledge: The Information Market.................... 1144

B. Successfully Functioning Information Markets.................... 1148

II. PREDICTING SUPREME COURT DECISIONS: THEORIESINNEEDOFAMARKET..... 1150

A. The Limitations of Existing Prediction Models.................... 1150

B. The Information Market as Improvement in Supreme Court Predictions.. 1158

III. DESIGNING A SUPREME COURT INFORMATION MARKET.................... 1167

A. Open Markets.................... 1168

B. Expert Markets: Separating the Sheep from the Wolves.................... 1169

C. Competing Markets.................... 1181

IV. CONSEQUENCES OF A SUPREME COURT INFORMATION MARKET ......................... 1182

A. Benefit to Bar and Lower Bench....................1182

B. For the Supreme Court: A Mixed Blessing.................... 1185

C. Moving into the Future: Tiresias as a Bridge.................... 1191

In ancient Greek mythology, oracles and seers could foretell the actions of gods and kings. With these predictions, ordinary citizens could glimpse the future actions of their rulers, and the recipients treasured those insights.

Such knowledge may be more than myth. This Article explores the power of the information market, an economic instrument that allows groups of participants to merge their collective knowledge to make predictions. Specifically, we discuss the application of information markets to predicting Supreme Court decisions. The implications are significant: Supreme Court rulings determine issues critical to American politics and business, ranging from the Fifth Amendment rights of property owners, to abortion and affirmative action, to claims of securities fraud. The ability to know a probable Supreme Court outcome in advance can potentially create monetary value for practitioners, provide guidance for lower courts, and perhaps even influence the Supreme Court itself.

Applying information markets to the Supreme Court offers a new way of understanding its rulings. Current prediction efforts centered in legal methodology are largely bound up in individual normative argument, while formal theoretical models of decisionmaking grounded in political science are postdictive and tend to concentrate heavily on political ideology.2 Information markets offer an alternative, one that will aggregate the predictions of those who are knowledgeable about the Court's decisionmaking into an information market that rewards correct analysis.3 An information market of this kind, which we propose naming Tiresias,4 should lead to more accurate forecasts of Supreme Court decisions and further demonstrate the potential of information markets.

To date, the intersection of law and information markets has been largely unexplored. The most extensive discussion has concerned applying information markets not to courts, but to administrative agencies.5 Other potential legal applications of information markets, such as application to the judiciary, have yet to be discussed. Similarly, theories of Supreme Court prediction could be developed further. Current theories of Supreme Court prediction tend to focus on precedent-based models (legal theory) or to rely on the political ideology of the Justices (political or attitudinal theory).6 Although researchers at Washington University in St. Louis designed empirical studies based on these two models for the 2002 Supreme Court Term, the studies did not aggregate the opinions of experts in the way an information market would, and they must be revised to reflect new personnel on the Court.7

Therefore, this Article presents the first extended discussion of how information markets might be used to predict Supreme Court outcomes. …