System and method of making markets for a finite subset of orders placed across continuous and countably infinite outcome spaces
First Claim
1. A computer system for a prediction market, comprising:
- a processor device performing as a prediction market engine providing services to support prediction markets aggregating information about orders placed on a continuous interval of a continuous outcome space by performing steps of;
receiving a plurality of orders from a plurality of traders, each order specifying a non-empty open continuous interval of the continuous outcome space;
determining prices of the orders to accept using a payout function of a continuous-outcome dynamic pari-mutuel market;
transmitting information to traders in the prediction market, said information comprising the quantities and the prices of the orders;
collecting amounts owed for the orders accepted by the traders;
identifying winning accepted orders;
determining winning amounts; and
paying out the winning amounts for the accepted orders; and
a storage operably coupled to the processor device storing the orders placed on the continuous intervals of the continuous outcome space.
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Abstract
An improved system and method is provided for making markets for a finite subset of orders across continuous and countably infinite outcome spaces. To do so, a prediction market engine may be provided to support prediction markets by aggregating information about orders specifying a continuous subspace of a continuous outcome space and orders specifying a subset of a countably infinite set of outcomes. The pricing and/or quantities for orders received may be determined, a response may be sent to traders indicating the pricing or quantities of orders for payment, and the amount owed for accepted orders may be collected. Winning accepted orders may be identified and payout may be made for winning accepted orders. Advantageously, the present invention may support aggregation of more information from market participants in a prediction market to forecast the likelihood of the occurrence of a certain event.
4 Citations
10 Claims
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1. A computer system for a prediction market, comprising:
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a processor device performing as a prediction market engine providing services to support prediction markets aggregating information about orders placed on a continuous interval of a continuous outcome space by performing steps of; receiving a plurality of orders from a plurality of traders, each order specifying a non-empty open continuous interval of the continuous outcome space; determining prices of the orders to accept using a payout function of a continuous-outcome dynamic pari-mutuel market; transmitting information to traders in the prediction market, said information comprising the quantities and the prices of the orders; collecting amounts owed for the orders accepted by the traders; identifying winning accepted orders; determining winning amounts; and paying out the winning amounts for the accepted orders; and a storage operably coupled to the processor device storing the orders placed on the continuous intervals of the continuous outcome space. - View Dependent Claims (2, 3)
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4. A computer-implemented method of operating a prediction market, comprising:
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using a processor device, performing steps of; receiving a plurality of orders, each order specifying a non-empty open continuous interval of a continuous outcome space from a plurality of traders in the prediction market; determining prices of the orders to accept using a payout function of a continuousoutcome dynamic pari-mutuel market; transmitting information to the traders in the prediction market, said information comprising the quantities and the prices of the orders; collecting an amount for the at least one order of the plurality of orders accepted from at least one trader of the plurality of traders; identifying at least one winning accepted order; determining winning amounts; and paying out a winning amount for the at least one winning accepted order. - View Dependent Claims (5, 6, 7, 8, 9, 10)
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Specification