Rothschild, David; Pennock, David M. - In: Algorithmic Finance 3 (2014) 1-2, pp. 3-20
We study misaligned prices for logically related contracts in prediction markets. First, we uncover persistent … shut down or fail to respond efficiently. Third, we document bounded rationality in prediction markets; examples include … prediction markets by moving the burden of finding and fixing logical contradictions into the exchange and providing flexible …