What is the difference between gambling and “futures” or prediction markets?
In prediction markets, investors make investments based upon their beliefs about the future, and their profits or losses depend upon the outcomes of their investments. But unlike gambling, r futures markets can provide some “social good,” the most common of which is to allow investors to “hedge risk” or to protect themselves against future price increases. For example, agricultural futures markets have caused a net stabilization of commodity prices, which greatly benefited the industry by reducing uncertainty about future prices. In addition, the prediction markets run by the University of Iowa [link http://www.biz.uiowa.edu/iem/] provide a social benefit because they are used for education and research and because they generate useful information that, in the case of the Health Prediction Markets, could help help health care workers, public health officials and hospital administrators better prepare for outbreaks.
