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Incentive settlement "with result"

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Summary

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Produces the most objective and precise predictions. But participants have to wait for their money till the outcome is certain.

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Settlement method

Settlement with the final result means that settlement can occur once the outcome of a future question was determined in the real world.

All trades "for" the one winning answer will be judged at a win paying 1 credit per share, trades for all other answers pay nothing, as do trades "against" the correct answer. Logically, trades against all other answers will also pay 1 credit per share as these answers did, in fact, not happen.

Advantages and disadvantages

Pro

  • Users will give their most objective prediction, firmly rooted in expected reality.
  • Prices converge rapidly, right to the last traders' own expected likelihood of an answer.

Con

  • Less motivating for long term questions (for the same incentive amount) running longer than one to three months. It is highly advisable to provide larger incentives to long running questions.