A Prediction Market is a Trading Market established to prediction future events and outcomes. Participants betting on the probability of an event occurring and are rewarded for making correct predictions. Prediction (the) market (as a concept) aims to improve the accuracy of the overall prediction by aggregating individual knowledge and opinions.
The relationship between forecast markets and [degree of confidence
The relationship between prediction markets and confidence is closely related. Confidence is the probability of believing that an event will occur, and in a prediction market, this confidence is reflected in the transaction price.
Participants in the prediction market place bets based on the level of certainty they have about a future event or outcome. If participants rate the probability of an event as high, they will increase their bets on that forecast. Conversely, if they rate the probability of an event as low, they will bet less on that prediction.
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