Kay-Yut Chen, Leslie R. Fine, Bernardo A. Huberman
HP Laboratories
Palo Alto, CA 94304
Abstract
We present a novel methodology for predicting future outcomes that uses small
numbers of individuals participating in an imperfect information market. By
determining their risk attitudes and performing a nonlinear aggregation of their predictions, we are able to assess
the probability of the future outcome of an uncertain event and compare it to
both the objective probability of its occurrence and the performance of the
market as a whole. Experiments show that this nonlinear aggregation mechanism
vastly outperforms both the imperfect market and the best of the participants.
Full paper: future.pdf
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