Effects of Social Networks on Prediction Markets: Examination in a Controlled Experiment

References

• Aral, S., and Walker, D. Creating social contagion through viral product design: A randomized trial of peer influence in networks. Management Science, 57, 9 (2011), 1623-1639.
   Google Scholar
• Armstrong, J.S. Principles of Forecasting: A Handbook for Researchers and Practitioners. Norwell, MA: Kluwer Academic, 2001.
   Google Scholar
• Bapna, R.; Gupta, A.; Rice, S.; and Sundararajan, A. Trust, reciprocity and the strength of social ties: An online social network based field experiment. Working Paper, University of Minnesota, Minneapolis, 2011.
   Google Scholar
• Berg, J.E.; Neumann, G.R.; and Rietz, T.A. Searching for Google's value: Using prediction markets to forecast market capitalization prior to an initial public offering. Management Science, 55, 3 (2009), 348-361.
   Google Scholar
• Berg, J.E.; Forsythe, R.; Nelson, F.; and Rietz, T. Results from a dozen years of election futures markets research. In C.R. Plott and V.L. Smitt (eds.), Handbook of Experimental Economics Results. Amsterdam: Elsevier Science, 2008, pp. 742-751.
   Google Scholar
• Berg, J.E., and Rietz, T.A. Prediction markets as decision support systems. Information Systems Frontiers, 5, 1 (2003), 79-93.
   Google Scholar
• Brown, M.B., and Forsythe, A.B. Robust tests for the equality of variances. Journal of the American Statistical Association, 69, 346 (1974), 364-367.
   Google Scholar
• Cameron, A.C.; Gelbach, J.B.; and Miller, D.L. Bootstrap-based improvements for inference with clustered errors. Review of Economics and Statistics, 90, 3 (2008), 414-427.
   Google Scholar
• Çelen, B., and Hyndman, K. Social learning through endogenous information acquisition: An experiment. Management Science, 58, 8 (2012), 1525-1548.
   Google Scholar
• Chen, J.; Xu, H.; and Whinston, A.B. Moderated online communities and quality of user-generated content. Journal of Management Information Systems, 28, 2 (Fall 2011), 237-268.
   Google Scholar
• Chen, K., and Plott, C. Information aggregation mechanisms: Concept, design and implementation for a sales forecasting problem. Working Paper no. 1131, California Institute of Technology Social Science, Pasadena, 2002.
   Google Scholar
• Cohen, L.; Frazzini, A.; and Malloy, C.J. The small world of investing: Board connections and mutual fund returns. Journal of Political Economy, 116, 5 (2008), 951-979.
   Google Scholar
• Coval, J.D., and Moskowitz, T.J. The geography of investment: Informed trading and asset prices. Journal of Political Economy, 109, 4 (2001), 811-841.
   Google Scholar
• Erdős, P., and Rényi A. On the evolution of random graphs. Publications of the Mathematical Institute of the Hungarian Academy of Sciences, 5 (1960), 17-61.
   Google Scholar
• Fang, F.; Stinchcombe, M.; and Whinston, A.B. Proper scoring rules with arbitrary value functions. Journal of Mathematical Economics, 46, 6 (2010), 1200-1210.
   Google Scholar
• Foutz, N.Z., and Jank, W. Prerelease demand forecasting for motion pictures using functional shape analysis of virtual stock markets. Marketing Science, 29, 3 (2010), 568-579.
   Google Scholar
• Galeotti, A.; Goyal S.; Jackson, M.O.; Vega-Rendondo, F.; and Yariv L. Network games. Review of Economic Studies, 77, 1 (2010), 218-244.
   Google Scholar
• Garg, R.; Smith, M.D.; and Telang, R. Measuring information diffusion in an online community. Journal of Management Information Systems, 28, 2 (Fall 2011), 11-38.
   Google Scholar
• Gaviria, A., and Raphael, S. School-based peer effects and juvenile behavior. Review of Economics and Statistics, 83, 2 (2001), 257-268.
   Google Scholar
• Gillen, B.J.; Plott, C.R.; and Shum, M. Information aggregation mechanisms in the field: Sales forecasting inside Intel. Working paper, California Institute of Technology Social Science, Pasadena, 2012.
   Google Scholar
• Golub, B., and Jackson, M. Naive learning in social networks and the wisdom of crowds. American Economic Journal: Microeconomics, 2, 1 (2010), 112-149.
   Google Scholar
• Guo, Z., Fang, F., and Whinston, A.B. Supply chain information sharing in a macro prediction market. Decision Support Systems, 42(3), (2006), 1944-1958.
   Google Scholar
• Hanson, R. Combinatorial information market design. Information Systems Frontiers, 5, 1 (2003), 107-119.
   Google Scholar
• Healy, P.J.; Linardi, S.; Lowery, J.R.; and Ledyard, J.O. Prediction markets: Alternative mechanisms for complex environments with few traders. Management Science, 56, 11 (2010), 1977-1996.
   Google Scholar
• Hinz, O., and Spann, M. The impact of information diffusion on bidding behavior in secret reserve price auctions. Information Systems Research, 19, 3 (2008), 351-368.
   Google Scholar
• Jackson, M.O. Social and Economic Networks. Princeton: Princeton University Press, 2008.
   Google Scholar
• Jian, L., and Sami, R. Aggregation and manipulation in prediction markets: Effects of trading mechanism and information distribution. Management Science, 58, 1 (2012), 123-140.
   Google Scholar
• Lorenz, J.; Rauhut, H.; Schweitzer, F.; and Helbing, D. How social influence can undermine the wisdom of crowd effect. Proceedings of the National Academy of Sciences, 108, 22 (2011), 9020-9025.
   Google Scholar
• Manski, C.F. Identification of endogenous social effects: The reflection problem. Review of Economic Studies, 60, 3 (1993), 531-542.
   Google Scholar
• Qiu, L.; Rui, H.; and Whinston, A.B. Social network-embedded prediction markets: The effects of information acquisition and communication on predictions. Decision Support Systems, 5, 4 (2013), 978-987.
   Google Scholar
• Qiu, L.; Rui, H.; and Whinston, A.B. The impact of social network structures on prediction market accuracy in the presence of insider information. Journal of Management Information Systems, 31, 1 (Summer 2014), forthcoming.
   Google Scholar
• Sacerdote, B. Peer effects with random assignment: Results for Dartmouth roommates. Quarterly Journal of Economics, 116, 2 (2001), 681-704.
   Google Scholar
• Sorensen, A.T. Social learning and health plan choice. RAND Journal of Economics, 37, 4 (2006), 929-945.
   Google Scholar
• Spann, M., and Skiera, B. Internet-based virtual stock markets for business forecasting. Management Science, 49, 10 (2003), 1310-1326.
   Google Scholar
• Stieglitz, S., and Dang-Xuan, L. Emotions and information diffusion in social media—Sentiment of microblogs and sharing behavior. Journal of Management Information Systems, 29, 4 (Spring 2013), 217-248.
   Google Scholar
• Temple, J., and Johnson, P. A. Social capability and economic growth. Quarterly Journal of Economics, 113, 3 (1998), 965-990.
   Google Scholar
• Wattal, S.; Racherla, P.; and Mandviwalla, M. Network externalities and technology use: A quantitative analysis of intraorganizational blogs. Journal of Management Information Systems, 27, 1 (Summer 2010), 145-174.
   Google Scholar
• Wooldridge, J.M. Econometrics Analysis of Cross Section and Panel Data. Cambridge: MIT Press, 2002.
   Google Scholar
• Wooldridge, J.M. Cluster-sample methods in applied econometrics. American Economic Review, 93, 2 (2003), 133-138.
   Google Scholar
• Yousuf, H. False White House explosion tweet rattles market. CNNMoney, April 23, 2013 (available at http://buzz.money.cnn.com/2013/04/23/ap-tweet-fake-white-house/?iid=EL/
   Google Scholar
• Zhang, X., and Wang, C. Network positions and contributions to online public goods: The case of Chinese Wikipedia. Journal of Management Information Systems, 29, 2 (Fall 2012), 11-40.
   Google Scholar