prediction market indices

A published methodology that selects prediction markets, assigns each a weight, and combines their prices into a single measure of a broader condition — e.g. regional stability or party power. Weights are necessarily subjective, but publishing them makes the judgment inspectable and turns a scattered set of event prices into a persistent time series.

Cluster: Mechanism Design

Related Concepts

• information aggregation — The process by which markets combine dispersed private knowledge into a single consensus price signal.
• price discovery — The process through which trading activity reveals the fair value or true probability of an event.
• market structure — The organization and stratification of prediction market platforms into distinct layers — rails (settlement/execution), wrappers (distribution/user access), and product archetypes — and the competitive dynamics between them.
• legibility — The degree to which market prices reveal specific underlying information. Prediction markets have high legibility because contracts reference explicit events, making the information behind a price move visible to all participants unlike stocks where price moves have ambiguous causes.

Articles about prediction market indices

• Prediction Markets Need Indices by Alan Wu