Zero-intelligence agents in prediction markets

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Zero-intelligence agents in prediction markets

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International Conference on Autonomous Agents archive
Proceedings of the 7th international joint conference on Autonomous agents and multiagent systems - Volume 2 table of contents

Estoril, Portugal

SESSION: Economic paradigms table of contents

Pages: 879-886

Year of Publication: 2008

ISBN:978-0-9817381-1-6

Author

Abraham Othman

Carnegie Mellon University

Sponsors

AAAI : Association for the Advancement of Artifical Intelligence
ACM: Association for Computing Machinery

Publisher

International Foundation for Autonomous Agents and Multiagent Systems Richland, SC

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ABSTRACT

We construct a novel agent-based model of prediction markets in which putative human qualities like learning, reasoning, and profit-seeking are absent. We show that the prices which emerge from a market populated by a class of distinctly inhuman agents, Zero-Intelligence agents with diffuse beliefs, replicate the findings of empirical market studies. We use this result to argue against the prevailing descriptive theories of price formation in prediction markets, which have stressed the role of expert, rational participants.

REFERENCES

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