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Prediction markets - algorithm

Prediction markets like hollywood stock exchange (www.hsx.com), Inkling markets use a automated market maker alogorithm.

I guess they are based upon the algorithm developed by Robin Hanson, PDF (http://hanson.gmu.edu/mktscore.pdf). The paper is highly mathematical and I cannot understand most of it.

Has any one worked/read this paper or anything about automated market makers?
Narasimha Send private email
Wednesday, October 11, 2006
 
 
Interesting paper. I'm surprised this didn't get any replies.
Lenny
Friday, October 13, 2006
 
 

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