Polity Atlas
Glossary term

Decision market

Also: conditional prediction marketЧитать на русском

A conditional prediction market in which traders forecast an outcome under each of several possible decisions, so that prices indicate which choice is expected to produce better results.

In more detail

For example, one market might predict a city's unemployment rate if a policy is adopted and another if it is rejected; trades in the branch not chosen are cancelled. Decision markets are the core of Robin Hanson's futarchy proposal and are used by some decentralised organisations. Their main weakness is that conditional prices reflect expected correlations, not necessarily causal effects, and thin markets can be manipulated.