Accelerating Democracy: Transforming Governance through Technology

By John O. McGinnis | Go to book overview

CHAPTER FOUR
Unleashing Prediction Markets

POLITICAL PREDICTION MARKETS—markets that allow the public to speculate on election and policy outcomes—have the potential to improve the capacity of democracy to update on the facts in our day, just as the rise of the press improved its capacity in an earlier era.1 These markets can elicit information about the likely effects of policies even before they are implemented from those who are most knowledgeable about their effects.

Prediction markets temper three of the largest problems of politics. First, they offer a mechanism for overcoming what has been called the “basic public action problem” of collective decision making—the difficulty of persuading individual citizens to provide information that is useful to the whole community. This problem goes back to the origins of democracy: “How does Athens know what Athenians know?”2 Prediction markets give citizens stronger reputational and monetary incentives to inject their private information into the public domain, thus improving social knowledge. Second, the markets help mix expert and dispersed opinion. Expert views influence prediction markets, but they can be tested by outliers who are willing to put their money where their mouth is. Finally, prediction markets are able to draw together information into a single place and numerical form, economizing on the attention of citizens. This latter capacity is particularly important today, because in an age of accelerating technology, people are likely to be distracted from the business of public life by the more compelling entertainment of private life.

Prediction markets can enrich democratic deliberation only if our legal policy toward them is changed. Currently our law inhibits their growth. For the future, the government must not only unchain these shackles but also fund experiments to help discover the most promising designs of such markets.


The Nature of Prediction Markets

In prediction markets traders can buy shares that pay off if a specified event occurs, like a candidate’s victory in a presidential election.3 Some

-60-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Accelerating Democracy: Transforming Governance through Technology
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 214

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.