Results from a Simple Prediction Contest
24 Pages Posted: 26 Dec 2010
Date Written: December 23, 2010
In a prediction contest participants compete for a prize by submitting guesses regarding an unknown variable; the winner of the contest is the participant who submits the most accurate guess. In this paper the results of a simple prediction contest are reported. In the contest, certain members of the administration of a medium-sized university were asked to predict the number of freshmen deposits the university would receive by its spring deadline. Contest participants were told that the contest participant who submitted the most accurate guess would receive a $100 prize. With this incentive-compatible mechanism in place, the average guess from the contest was used as a forecast for the number of deposits. This forecast was at least as accurate as any other simple forecast method.
Keywords: prediction contest, prediction market, information aggregation, forecasting
JEL Classification: C53, C9, D8
Suggested Citation: Suggested Citation