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This Article focuses on why information markets have covered certain subject areas, sometimes of minor importance, while neglecting other subject areas of greater significance. To put it another way, why do information markets exist to predict the outcome of the papal conclave and the Michael Jackson trial, but no information markets exist to predict government policy conclusions, Supreme Court decisions, or the rulings in Delaware corporate law cases? Arguably, from either a dollar value or a social utility perspective, these areas of law and business would be more important than the outcome of, say, the Jackson trial. Why, then, do these frivolous markets on celebrities like Michael Jackson thrive, while others with more serious aims have yet to be started?

To answer this question, we present data from interviews with market founders about their motivations in starting various information markets. In Section III, we insert the data into an analytical framework, exploring where markets exist (primarily politics and entertainment), where they do not, and some of the reasons, including legal considerations and microeconomic decisions, that affect the subjects that information markets cover. In particular, the laws about gambling seem to have had a significant impact on the development of information markets.

Despite a trend toward information markets in entertainment and politics, the emergence of an information market in any particular subject area is at least partially the product of a random walk, meaning that it cannot be predicted in advance from past data. Finally, in the last part of our Article, we contemplate whether information markets must endure the vagaries of the random walk or whether they could develop in a more organized and systematic way, either through private institutions or through government action.