This paper examines five significant issues with prediction markets and attempts to solve them in order to determine if the current level of enthusiasm for their potential is appropriate or not. One of the points argued is that prediction markets depend heavily on the "uninformed trader" who is ironically the hardest type of person to attract. They recognize that play-money markets have been found to predict as effectively as real-money markets, but argue that the issue of attracting this type of person still exists. Finally they conclude that offering sports or entertainment betting, subsidizing the investment and personal career concerns have been chief effective motivators in the past for this sector of trader.

While this article also examines other issues with prediction markets, the question of the "uninformed trader" is one crucial to the argument of the diverse crowd and choosing the right incentives. They develop an interesting conclusion on this issue, that is not really repeated in any other literature on the subject. However, since in the case of the markets I am studying, the entertainment value already exists, and there is no way to purposefully boost career concerns, it seems that subsidizing the investment is the only plausable incentive they seem to offer to reach more diverse crowds. My question from this article is why they would even worry about conducting the market in real money if play-money games with prizes seemed to work just as effectively?

This article challenges the conventional belief amongst economists that "markets where traders risk their own money should produce better forecasts than markets where traders run no financial risk." In actuality, real money markets reflect more than past predicitive performance, they relfect an entire mass of social factors behind individual wealth, like financial status and willingness to take risks. Play-money prediction markets are based solely on track record and previous predictive performance and many systems use this model in addition to prize incentives based on rank to ensure players continue to buy and sell. The primary research of this paper is a study conducted to determine the level of accuracy sacrificed when using play-money compared to real-money prediction markets. The conclusion reached was that both markets were almost identical in accuracy.

It appears that though the predicitve power of these two real and play money markets are about equal, that the play-money one would actualy average a closer fit to Surowiecki's opinions about what constitutes a good market by eliminating the discouraging financial factor. This study is crucial in the examination of incentives as it attacks a noticible divide within the prediction market world.

This is an article written by Shujen Wang which was published in Cinema Journal, Vol. 43, No. 1 (Autumn, 2003), pp. 25-43 by the University of Texas.  This article focuses on how anti-piracy initiatives of industrial states and transnational corporations seek to maintain control over property and markets, even in the fact of technological challenges and changes.  This paper provides a market oriented analysis of the purpose of anti-piracy initiatives including anti-circumvention provisions in order to extract their net effect on global markets for content and property.  Wang does a good job of analyzing the relevant policies--as all of the other scholars do--but he extends his analysis a step further to show how big corporations and their subsidiaries (for example the MPAA) have a huge role in shaping national and international trade policies.  This is particularly poignant in light of the WIPO standards that led to the perceived need to pass legislation like the DMCA, as well as the growing role of copyright legislation in other, prominent international talks, including the Uruguay round of GATT talks (which established the WTO), as well as the WTO's subsequent agreement on TRIPS (trade-related aspects of intellectual property rights). 

This topic is critical to national and international governmental policies; however, an analysis of firms, consumers, producers, owners and creators alike is essential to the analysis of the direct impact of these policies on the economy.  Wang's work masterfully details the size and scope of the booming technology industry--both globally and within the United States--and offers a detailed account of what their biggest goals are, and how they will wield market dominance to maintain their control and prosperity.  Wang details how piracy effects large firms, and how anti-circumvention measures have deterred piracy.

This piece is unique within my body of sources, and absolutely essential to my research.  It is very refreshing that Wang offers more market oriented analysis, rather than getting caught up on the legislative details.  Although it is often best to conduct one's own theoretical survey of the effects of legislative language on the economy, Wang's piece provides substantive detail that is will be very beneficial to the clarity and consistency of my paper.