Learning Prediction Markets is an in-depth textbook exploring how prediction markets aggregate information and produce forecasts. From the Iowa Electronic Markets to modern platforms like Polymarket, prediction markets have proven to be powerful tools for estimating the probability of future events.
This book covers the theoretical foundations including market microstructure, information aggregation, and the wisdom of crowds. You'll learn about binary contracts, order book mechanics, market making strategies, and how to evaluate forecast accuracy using proper scoring rules like the Brier score.
Practical topics include trading strategies, portfolio management, calibration assessment, and the regulatory landscape for prediction markets. Whether you're interested in trading, forecasting, or understanding how markets process information, this textbook provides a thorough grounding.