Futarchy: Vote Values, But Bet Beliefs (2013)

For example, racetrack market odds improve on the predictions of racetrack experts, Florida orange juice commodity futures improve on government weather forecasts, betting markets beat opinion polls at predicting U.S. election results, and betting markets consistently beat Hewlett Packard official forecasts at predicting Hewlett Packard printer sales. A betting market can estimate whether a proposed policy would increase national welfare by comparing two conditional estimates: national welfare conditional on adopting the proposed policy, and national welfare conditional on not adopting the proposed policy. Betting markets can produce conditional estimates several ways, such as via “called-off bets,” i.e., bets that are called off if a condition is not met.

Source: mason.gmu.edu