Hybrid Event: Theis Ingerslev Jensen - Prediction Market Accuracy

About this event

IAQF & Thalesians Seminar Series: Prediction Market Accuracy: Crowd Wisdom or Informed Minority? A Seminar by Theis Ingerslev Jensen 6:00 PM Seminar Begins 7:30 PM Reception Fordham University McNally Amphitheater 140 West 62nd Street New York, NY 10023 Hybrid Event Free Registration! For Virtual Attendees: Please email [\[[email protected]\](mailto:[email protected])](http://%5Bweb%40iaqf.org%5D(mailto:[email protected])/) for the link. Abstract: Prediction markets produce remarkably accurate forecasts, but the source of this accuracy is poorly understood. Two explanations dominate: crowd wisdom and insider trading. Using the universe of Polymarket transactions, we show it is neither. Instead, accuracy comes from a minority of persistently skilled traders, around 3% of accounts. Unlike insiders, whose private edge is localized, these traders exhibit depth and breadth. They react to public news when it arrives, eliminate law-of-one-price violations, and trade against the crowd’s behavioral mistakes. The crowd, in turn, generates most of the volume but little of the information, and its losses fund the minority’s profits. Bio: Theis Ingerslev Jensen is an Assistant Professor of Finance at the Yale School of Management. Prior to joining Yale, he obtained his Ph.D. in financial economics from Copenhagen Business School. He conducts research in empirical asset pricing. His projects are often data-intensive, and he is especially interested in studying expectations. Much of Theis Ingerslev Jensen's recent work focuses on prediction markets.