Lesswrong’s prediction markets wiki entry:
People who buy low and sell high are rewarded for improving the market prediction, while those who buy high and sell low are punished for degrading the market prediction. Evidence so far suggests that prediction markets are at least as accurate as other institutions predicting the same events with a similar pool of participants.
It also has some useful links to explanatory blog posts. I cannot find a whole lot of published academic research in this area. Curious.
Zvi, When do prediction work?:
If I bet on a nuclear war, and win, how exactly am I getting paid?
These signals are of course noisy - see some nice plots from David Rothschild via Andrew Gelman.
Metaculus is a prediction market without currency apart from reputation. I don’t have sufficient OCD for that.
Only a few of these markets offer service in Australia, for reasons that are unclear to me. Do not bother telling me to use a VPN to access them; my bank account is still in Australia and that is how they check.