Virtual Stock Markets

Online based VSM (virtual stock markets) are used to predict short and medium-term market trends. VSM are bringing participants together online and let them trade and bet on virtual stocks or shares. Once the outcome of a specific share or stock of a given market is known, each virtual share or virtual stock receives a payoff cash dividend according to that specific outcome.

Studies demonstrate that the predictions derived from political stock markets outperform opinion polls in terms of forecast accuracy. Since then several political stock markets were provided for USA elections, as well as for Canada, Germany, the Netherlands and Austria.

The reason is that rational participants don't trade according to their individual preferences, but according to their prediction of the market outcome due to the total preferences of all participants.