I've always called these "decision markets", and will do so here to simplify the language in this discussion. But that term is overused to the point of being confusing, and I'm curious if anyone can come up with a better one.

By "decision market", I mean a prediction market in which the traders are explicitly attempting to predict a decision made by the market's own judge.

About Prediction Markets:

A prediction market is usually described as being one in which the traders are attempting to predict the outcome of some future event. But in implementation, a prediction market always has a judge -- usually a single person, but sometimes a committee -- who uses their own interpretation of the event's outcome to set contract values at expiration. So in effect, a prediction market is really a market in which the traders are attempting to predict the judge's decision regarding the event.

An example of a prediction market is one in which the traded contracts represent the probability of one or more political candidates winning an election. In this case, the prospectus describes how the judge will decide who the winner was, and might reference the New York Times as an external authority on the election results. A well-written prospectus will always provide an "escape" clause, though, to allow the judge to close out contracts at a reasonable price in the face of unforeseen circumstances, such as a failure of the newspaper itself.

About Decision Markets:

An example of a decision market is one in which the traded contracts represent the release date of an open-source software package. In this example, the judge is the maintainer of the package, and the prospectus states that the judge will ultimately decide when to release the software, based not only on available information such as outstanding known bugs, but also on the price information provided by the market itself. This, for example, gives the market the opportunity to provide quantified signals regarding issues that might otherwise be hidden in mailing list discussions.

I don't know of any active decision markets. I'd like to start an open-source project for software which would support them, which leads me to the above question.

  • How exactly does this "decision market" differ from a bookies? I've got to say I don't think coming up with suitable names here is really within ELU's remit. Commented Aug 12, 2014 at 21:53
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    Have you looked into parimutuel betting? en.m.wikipedia.org/wiki/Parimutuel_betting
    – Dan Bron
    Commented Aug 12, 2014 at 21:53
  • @FumbleFingers: A bookie is always the counterparty to all bets. Information availability is asymmetric, because the bookie sees all transactions, but their clients see little. Contrast this with a trading exchange, whether for stock, bonds, commodities, or in this case predictions, in which all trades are directly with peers, with the exchange only acting as facilitator, similar to the brick-and-mortar days of trading, where the exchange provided the pit room in return for a membership fee but did not partake in the trades themselves.
    – stevegt
    Commented Aug 12, 2014 at 23:20
  • @stevegt: In my understanding, most bookies these days are almost entirely administered by automated software, and the "clients" get to see the collective effect of everyone else's bets because they see the odds changing in line with where the money's going. If your system is going to make individual "bets" public, or provide facilities for "punters" to offer opinions/information over and above "What's the average market opinion as reflected by bets placed?", maybe it's really more of a forum. Commented Aug 12, 2014 at 23:30
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    @DanBron: "Trading" and "betting" are not really synonyms, despite popular misconception and probably most thesauruses. A trade is an exchange of transferable value between two parties, such as you buying a share of stock for later resale. A bet is gambling, a game of chance, such as you dropping a quarter in a slot machine and pulling the handle. You can later trade a financial instrument for something else of value, but you typically can't later trade the same bet with the slot machine to get your quarter back.
    – stevegt
    Commented Aug 12, 2014 at 23:33

3 Answers 3


If I understand the question correctly, you're asking for a word that describes a market where investors speculate on the future decision of a single agent, rather than on the net effects of many decisions made by many agents.

I'd suggest preemptive market. You're attempting to preempt the actions of a single agent.


May I suggest Prospect Market ? Participants evaluate the current prospects of a future event.


The existing phrase speculative markets seems to be quite consistent with the decision market the OP described, but would obviously generate confusing negative connotations.

Proactive seems to be a good alternative descriptor:


(Of a person or action) creating or controlling a situation rather than just responding to it after it has happened:


The Proactive Market is not only speculating on the decisions of judges, but also proactively influencing the decisions of judges by its advance action. This option seems to build synergy with the existing phrase proactive market orientation, which dominates the linked Ngram.

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