The document discusses how information markets, also known as idea futures markets, can be used to aggregate information from traders to forecast outcomes. It provides examples of existing information markets like NewsFutures, Foresight Exchange, Iowa Electronic Markets, Hollywood Stock Exchange and TradeSports. The markets allow trading of contracts on ideas, events or propositions. Price changes reflect changing beliefs about the likelihood of different outcomes. The document argues information markets have potential applications in instruction, like forecasting sales, assessing impact, managing projects and scanning the environment.

1. Applications of Stock Markets for Information in Instruction Rose M. Baker Workforce Assessment Center David L. Passmore Workforce Education & Development 2 November 2006

3. What techniques do you use to obtain information?

5. FUTURES MARKETS…

7. A typical commodity futures contract… 5,000 bushels of No. 2 Yellow Corn for delivery in Minneapolis, Minnesota on 1 March 2006.

10. Prices have useful features… Markets use prices to aggregate less-than-perfect, diverse, widely dispersed information among traders and disseminate this information to all market participants .

11. Prices have useful features… Aggregate knowledge from the informed and disseminate to the uniformed, even when the informed have only partial information (e.g., inside information, niche knowledge, intuition).

12. Prices have useful features… Act like a vacuum sweeper, collecting and aggregating information that is otherwise highly decentralized and privately held.

13. Prices have useful features… Prices on the futures market for Florida orange juice predict the long-term weather better than scientific weather forecasts.

14. INFORMATION FUTURES MARKETS…

16. An information futures market: Newsfutures … http://us.newsfutures.com

17. A NewsFutures market: Outcome of Super Bowl…

18. NewsFutures Super Bowl market: Price/volume plot history…

19. NewsFutures Super Bowl market: Price/volume plot for month…

20. NewsFutures Super Bowl market: Price/volume plot for week…

21. NewsFutures Super Bowl market: Price/volume plot for 24 hours…

22. NewsFutures Super Bowl market: Closing details…

24. An information futures market: Foresight Exchange … http://www.ideosphere.com

25. BUSH04 contract from Foresight Exchange … “ G.W. Bush, the president of the United States at the time that this claim started trading, will still be president on 2005-02-01 (after the inauguration after the election is usually scheduled).”

26. Criterion for judging BUSH04 … “ This claim will be TRUE even if elections are postponed or G.W. Bush remains in power by staging a coup. If there are events which make it confusing who the US president is, as of 2005-02-01, this claim is true if G.W. Bush is leading a sovereign government in at least part of the United States of America that has recognition of at least one of the UN Security Council permanent members (Britain, China, and Russia) other than the United States.”

27. Price plot for BUSH04

28. Volume plot for BUSH04

30. Iowa Electronic Markets…

31. Hollywood Stock Exchange…

32. TradeSports…

33. Intrade…

35. THE POTENTIAL…

36. Collective intelligence & markets in public eye

41. Potential for managing instructional development?

42. Sales forecasting… Futures market among sales people about whether a product or service will yield an amount of revenue by a target date

44. Project management… Futures market of whether a product or service will deliver on time, and, if not, when

47. Potential in instruction?

48. Rose M. Baker [email_address] David L. Passmore [email_address]

50. Applications of Stock Markets for Information in Instruction Rose M. Baker Workforce Assessment Center David L. Passmore Workforce Education & Development 2 November 2006