User adoption of wisdom of crowd: usage and performance of prediction market system

Abstract

Prediction markets have been adopted to forecast events (trends) and manage risks related to the events in different projects. This paper scrutinises the first prediction market system (PMS) established in Taiwan, which shows favourable accuracy of the PMS in predicting infectious diseases comparing with expected value of historical data for the same period. It further analyses the incentive structure as well as system quality of PMS to attract initial as well as continuous participation. The paper concludes that public welfare and hedonic motivations are the most significant factors driving members` initial participation in the PMS. And prize motivation influenced the trading performance in this prediction system. Finally, based upon theory of planned behaviour (TPB), this paper finds that satisfaction and perceived behaviour control of participants in the PMS have positive influences on continuance intention and actual participation, while peer influence has little positive impact.