Combinatorial Information Market Design
Information Systems Frontiers
Information incorporation in online in-Game sports betting markets
Proceedings of the 4th ACM conference on Electronic commerce
A dynamic pari-mutuel market for hedging, wagering, and information aggregation
EC '04 Proceedings of the 5th ACM conference on Electronic commerce
Information markets vs. opinion pools: an empirical comparison
Proceedings of the 6th ACM conference on Electronic commerce
Computer
A strategic model for information markets
Proceedings of the 8th ACM conference on Electronic commerce
Non-myopic strategies in prediction markets
Proceedings of the 9th ACM conference on Electronic commerce
Strategies in Dynamic Pari-Mutual Markets
WINE '08 Proceedings of the 4th International Workshop on Internet and Network Economics
Bluffing and strategic reticence in prediction markets
WINE'07 Proceedings of the 3rd international conference on Internet and network economics
| Hi-index | 0.00 |
We study the strategic behavior of risk-neutral non-myopic agents in Dynamic Parimutuel Markets (DPM). In a DPM, agents buy or sell shares of contracts, whose future payoff in a particular state depends on aggregated trades of all agents. A forward-looking agent hence takes into consideration of possible future trades of other agents when making its trading decision. In this paper, we analyze non-myopic strategies in a two-outcome DPM under a simple model of incomplete information and examine whether an agent will truthfully reveal its information in the market. Specifically, we first characterize a single agent's optimal trading strategy given the payoff uncertainty. Then, we use a two-player game to examine whether an agent will truthfully reveal its information when it only participates in the market once. We prove that truthful betting is a Nash equilibrium of the two-stage game in our simple setting for uniform initial market probabilities. However, we show that there exists some initial market probabilities at which the first player has incentives to mislead the other agent in the two-stage game. Finally, we briefly discuss when an agent can participate more than once in the market whether it will truthfully reveal its information at its first play in a three-stage game. We find that in some occasions truthful betting is not a Nash equilibrium of the three-stage game even for uniform initial market probabilities.