The Power of Play: Efficiency and Forecast Accuracy in Web Market Games

We analyze the efficiency and forecast accuracy of two market games on the World Wide Web: the Hollywood Stock Exchange (HSX) and the Foresight Exchange (FX). We quantify the degree of arbitrage available on HSX, and compare with a real-money market of a similar nature. We show that prices of HSX movie stocks provide good forecasts of actual box oce returns, and that prices of HSX securities in Oscar, Emmy, and Grammy award outcomes constitute accurate assessments of the actual likelihoods that ...