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
Pricing combinatorial markets for tournaments
STOC '08 Proceedings of the fortieth annual ACM symposium on Theory of computing
Complexity of combinatorial market makers
Proceedings of the 9th ACM conference on Electronic commerce
A unified framework for dynamic pari-mutuel information market design
Proceedings of the 10th ACM conference on Electronic commerce
Yoopick: a combinatorial sports prediction market
AAAI'08 Proceedings of the 23rd national conference on Artificial intelligence - Volume 3
WINE '09 Proceedings of the 5th International Workshop on Internet and Network Economics
Pari-mutuel markets: mechanisms and performance
WINE'07 Proceedings of the 3rd international conference on Internet and network economics
A new understanding of prediction markets via no-regret learning
Proceedings of the 11th ACM conference on Electronic commerce
Automated market-making in the large: the gates hillman prediction market
Proceedings of the 11th ACM conference on Electronic commerce
Cost function market makers for measurable spaces
Proceedings of the fourteenth ACM conference on Electronic commerce
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Most existing market maker mechanisms for prediction markets are designed for events with a finite number of outcomes. All known attempts on designing market makers for forecasting continuous-outcome events resulted in mechanisms with undesirable properties. In this paper, we take an axiomatic approach to study whether it is possible for continuous-outcome market makers to satisfy certain desirable properties simultaneously. We define a general class of continuous-outcome market makers, which allows traders to express their information on any continuous subspace of their choice.We characterize desirable properties of these market makers using formal axioms. Our main result is an impossibility theorem showing that if a market maker offers binary-payoff contracts, either the market maker has unbounded worst case loss or the contract prices will stop being responsive, making future trades no longer profitable. In addition, we analyze a mechanism that does not belong to our framework. This mechanism has a worst case loss linear in the number of submitted orders, but encourages some undesirable strategic behavior.