Prediction Markets

We are the only society at LSE, dedicated to understanding one of the most interesting ideas in finance: prediction markets.

A prediction market lets people enter into contracts that pay out based on whether a future event happens. If you think an outcome is likely and you turn out to be right, you get paid. The price of each contract reflects the crowd's best guess at the probability of that event, which is what makes these markets so powerful.

• The fascinating thing about prediction markets is that they can be understood in several different ways at once:
• A truth machine. By letting people put money behind their beliefs, prediction markets turn scattered opinions into a single, readable probability. They are a way for society to harness markets to figure out how likely future events really are.
• A hedging tool. Just as businesses insure against risk, prediction markets let people and organisations protect themselves against the financial consequences of uncertain events.
• An asset class. They offer a new way to put capital to work, rewarding those who can forecast the future more accurately than the crowd.
• An entertainment product. At their most accessible, they are a fun, engaging way to test your judgement against the world and see how right you really are.

Our society exists to explore all of these angles. Whether you are interested in markets, politics, economics, technology, or simply enjoy a good argument about what will happen next, there is a place for you here. We host discussions, run events, and dig into the theory and practice behind a phenomenon that is reshaping how we think about prediction itself.

Come and find out what the crowd knows.