Achievement

IGERT Fellow Stanko Dimitrov co-authored an influential paper, "Gaming Prediction Markets: Equilibrium Strategies with a Market Maker" which was published in Algorithmica (Chen, Dimitrov, Sami, Reeves, Pennock, Hanson, Fortnow, and Gonen, 2009).

In this paper, the authors study the equilibrium behavior of informed traders interacting with market scoring rule (MSR) market makers in a prediction market. A prediction market is a financial market specifically designed to aggregate decentralized information into an informative price about the likelihood of various outcomes. Empirically, such prediction markets outperform experts, group consensus, and polls across a variety of settings. The authors characterize the behavior of risk-neutral traders with incomplete information playing in a dynamic game.