Journalists wake up to the power of prediction markets

“Your audience collectively knows much more than you do.”

Will Twitter survive Elon Musk? Readers are Googling this question and reporters and columnists are working hard to provide an answer. But journalists are neglecting one of the most promising sources for answering it: prediction markets and forecasting platforms.

Prediction markets have been around in one form or another for decades and have already made inroads into journalism during elections. 2023 will be the year they become a source for other types of stories, simply because there’s now too much activity in the crowd forecasting world to ignore. For almost any question you can think of, there are online crowds making predictions. And if journalists do think of a question that isn’t yet being forecasted, there are platforms where they can pose it themselves.

For example, here are a few forecasts available as of this writing that speak to Twitter’s future:

These figures are aggregations of lots of individual amateur predictions. Why trust them?

First, the theory: as the economists Justin Wolfers and Eric Zitzewitz explain, prediction markets work because they provide: “1) incentives to seek information; 2) incentives for truthful information revelation; and 3) an algorithm for aggregating diverse opinions.”

They also have a strong track record. Research has shown that prediction markets predict election results better than Gallup polls, for example. They’ve accurately predicted movies’ box office performances, matched the accuracy of professional economic forecasters, and even done a better job than analysts or oil markets in predicting the U.S. invasion of Iraq. (“Prediction polls,” which also ask participants to make forecasts but don’t use a market, have a similarly strong track record.)

Prediction markets aren’t perfect. They’re only as good as the wisdom of their participants and the information those participants have access to. And, like any market, they can be vulnerable to manipulation without oversight.

Nonetheless, they’re a valuable tool for journalists and a complement to other sources. Reporters can use them the way financial journalists use other markets: They can be a source of news as well as one source among many explaining what’s going on.

The Economist has shown what this can look like by asking seasoned forecasters at Good Judgment Inc. to make predictions for its annual “The World Ahead” edition. The issue still includes the magazine’s traditional reporting as well as forecasts from the Economist Intelligence Unit, the company’s research arm, and predictions from big names in politics and business. The inclusion of Good Judgment’s “superforecasters” — who were selected based on their accuracy forecasting on open platforms — is an addition, not a substitute for traditional journalistic sources.

“The bigger picture here is that data-driven approaches are becoming popular in all kinds of journalism, and predictive/forward-looking journalism should follow suit,” said Tom Standage, a deputy editor at The Economist who edits The World Ahead. “That is why we partner with Good Judgment, and also why The Economist builds its own predictive models for elections, and why we often cite prediction markets too.”

Here’s a quick tour of the crowd forecasting landscape:

The big difference between these platforms and a publication like FiveThirtyEight, which also makes predictions and also has a strong track record, is that they depend on the collective judgment of their users rather than on statistical modeling. That allows them to make forecasts on topics where there’s less data — like the fate of Twitter.

Citing these platforms in stories is a good first step for journalists. The next step is for publications to ask their readers to participate. That’s what I’ve been doing with my newsletter: Each week I write about an economic or business story and ask readers to make a forecast. Over time readers see how their forecasts turn out, learn from each other, and hopefully improve their thinking. This process formalizes something most journalists already recognize: Your audience collectively knows much more than you do.

Walter Frick is the founder of Nonrival and a contributing editor at Harvard Business Review. He was previously an executive editor at Quartz and a Knight visiting fellow at the Nieman Foundation.

Will Twitter survive Elon Musk? Readers are Googling this question and reporters and columnists are working hard to provide an answer. But journalists are neglecting one of the most promising sources for answering it: prediction markets and forecasting platforms.

Prediction markets have been around in one form or another for decades and have already made inroads into journalism during elections. 2023 will be the year they become a source for other types of stories, simply because there’s now too much activity in the crowd forecasting world to ignore. For almost any question you can think of, there are online crowds making predictions. And if journalists do think of a question that isn’t yet being forecasted, there are platforms where they can pose it themselves.

For example, here are a few forecasts available as of this writing that speak to Twitter’s future:

These figures are aggregations of lots of individual amateur predictions. Why trust them?

First, the theory: as the economists Justin Wolfers and Eric Zitzewitz explain, prediction markets work because they provide: “1) incentives to seek information; 2) incentives for truthful information revelation; and 3) an algorithm for aggregating diverse opinions.”

They also have a strong track record. Research has shown that prediction markets predict election results better than Gallup polls, for example. They’ve accurately predicted movies’ box office performances, matched the accuracy of professional economic forecasters, and even done a better job than analysts or oil markets in predicting the U.S. invasion of Iraq. (“Prediction polls,” which also ask participants to make forecasts but don’t use a market, have a similarly strong track record.)

Prediction markets aren’t perfect. They’re only as good as the wisdom of their participants and the information those participants have access to. And, like any market, they can be vulnerable to manipulation without oversight.

Nonetheless, they’re a valuable tool for journalists and a complement to other sources. Reporters can use them the way financial journalists use other markets: They can be a source of news as well as one source among many explaining what’s going on.

The Economist has shown what this can look like by asking seasoned forecasters at Good Judgment Inc. to make predictions for its annual “The World Ahead” edition. The issue still includes the magazine’s traditional reporting as well as forecasts from the Economist Intelligence Unit, the company’s research arm, and predictions from big names in politics and business. The inclusion of Good Judgment’s “superforecasters” — who were selected based on their accuracy forecasting on open platforms — is an addition, not a substitute for traditional journalistic sources.

“The bigger picture here is that data-driven approaches are becoming popular in all kinds of journalism, and predictive/forward-looking journalism should follow suit,” said Tom Standage, a deputy editor at The Economist who edits The World Ahead. “That is why we partner with Good Judgment, and also why The Economist builds its own predictive models for elections, and why we often cite prediction markets too.”

Here’s a quick tour of the crowd forecasting landscape:

The big difference between these platforms and a publication like FiveThirtyEight, which also makes predictions and also has a strong track record, is that they depend on the collective judgment of their users rather than on statistical modeling. That allows them to make forecasts on topics where there’s less data — like the fate of Twitter.

Citing these platforms in stories is a good first step for journalists. The next step is for publications to ask their readers to participate. That’s what I’ve been doing with my newsletter: Each week I write about an economic or business story and ask readers to make a forecast. Over time readers see how their forecasts turn out, learn from each other, and hopefully improve their thinking. This process formalizes something most journalists already recognize: Your audience collectively knows much more than you do.

Walter Frick is the founder of Nonrival and a contributing editor at Harvard Business Review. He was previously an executive editor at Quartz and a Knight visiting fellow at the Nieman Foundation.

Jacob L. Nelson   Despite it all, people will still want to be journalists

J. Siguru Wahutu   American journalism reckons with its colonialist tendencies

Peter Sterne   AI enters the newsroom

Rodney Gibbs   Recalibrating how we work apart

Basile Simon   Towards supporting criminal accountability

Anita Varma   Journalism prioritizes the basic need for survival

Josh Schwartz   The AI spammers are coming

Elizabeth Bramson-Boudreau   More of the same

Alex Sujong Laughlin   Credit where it’s due

Ryan Kellett   Airline-like loyalty programs try to tie down news readers

Jakob Moll   Journalism startups will think beyond English

Ståle Grut   Your newsroom experiences a Midjourney-gate, too

Amy Schmitz Weiss   Journalism education faces a crossroads

Nicholas Diakopoulos   Journalists productively harness generative AI tools

Pia Frey   Publishers start polling their users at scale

Cassandra Etienne   Local news fellowships will help fight newsroom inequities

Sarabeth Berman   Nonprofit local news shows that it can scale

Sam Gregory   Synthetic media forces us to understand how media gets made

Raney Aronson-Rath   Journalists will band together to fight intimidation

Shanté Cosme   The answer to “quiet quitting” is radical empathy

Sarah Stonbely   Growth in public funding for news and information at the state and local levels

Alex Perry   New paths to transparency without Twitter

Mauricio Cabrera   It’s no longer about audiences, it’s about communities

Dannagal G. Young   Stop rewarding elite performances of identity threat

Megan Lucero and Shirish Kulkarni   The future of journalism is not you

Cindy Royal   Yes, journalists should learn to code, but…

Ben Werdmuller   The internet is up for grabs again

Matt Rasnic   More newsroom workers turn to organized labor

Johannes Klingebiel   The innovation team, R.I.P.

Tre'vell Anderson   Continued culpability in anti-trans campaigns

Paul Cheung   More news organizations will realize they are in the business of impact, not eyeballs

Eric Nuzum   A focus on people instead of power

Cari Nazeer and Emily Goligoski   News organizations step up their support for caregivers

Walter Frick   Journalists wake up to the power of prediction markets

Masuma Ahuja   Journalism starts working for and with its communities

An Xiao Mina   Journalism in a time of permacrisis

Victor Pickard   The year journalism and capitalism finally divorce

Amethyst J. Davis   The slight of the great contraction

Kaitlyn Wells   We’ll prioritize media literacy for children

Taylor Lorenz   The “creator economy” will be astroturfed

Mael Vallejo   More threats to press freedom across the Americas

Emily Nonko   Incarcerated reporters get more bylines

Delano Massey   The industry shakes its imposter syndrome

Sam Guzik   AI will start fact-checking. We may not like the results.

Felicitas Carrique and Becca Aaronson   News product goes from trend to standard

Gabe Schneider   Well-funded journalism leaders stop making disparate pay

Jenna Weiss-Berman   The economic downturn benefits the podcasting industry. (No, really!)

Karina Montoya   More reporters on the antitrust beat

Tim Carmody   Newsletter writers need a new ethics

Jim VandeHei   There is no “peak newsletter”

Mario García   More newsrooms go mobile-first

Errin Haines   Journalists on the campaign trail mend trust with the public

Ariel Zirulnick   Journalism doubles down on user needs

Peter Bale   Rising costs force more digital innovation

Sarah Alvarez   Dream bigger or lose out

Alexandra Borchardt   The year of the climate journalism strategy

Simon Galperin   Philanthropy stops investing in corporate media

Nicholas Jackson   There will be launches — and we’ll keep doing the work

Andrew Losowsky   Journalism realizes the replacement for Twitter is not a new Twitter

Jessica Clark   Open discourse retrenches

Parker Molloy   We’ll reach new heights of moral panic

Jaden Amos   TikTok personality journalists continue to rise

Cory Bergman   The AI content flood

Juleyka Lantigua   Newsrooms recognize women of color as the canaries in the coal mine

Alexandra Svokos   Working harder to reach audiences where they are

Hillary Frey   Death to the labor-intensive memo for prospective hires

Ryan Gantz   “I’m sorry, but I’m a large language model”

Khushbu Shah   Global reporting will suffer

Zizi Papacharissi   Platforms are over

Michael Schudson   Journalism gets more and more difficult

Ayala Panievsky   It’s time for PR for journalism

Tamar Charney   Flux is the new stability

Jennifer Brandel   AI couldn’t care less. Journalists will care more. 

Mariana Moura Santos   A woman who speaks is a woman who changes the world

David Skok   Renewed interest in human-powered reporting

Jonas Kaiser   Rejecting the “free speech” frame

Don Day   The news about the news is bad. I’m optimistic.

Leezel Tanglao   Community partnerships drive better reporting

Jody Brannon   We’ll embrace policy remedies

Joni Deutsch   Podcast collaboration — not competition — breeds excellence

Janet Haven   ChatGPT and the future of trust 

Andrew Donohue   We’ll find out whether journalism can, indeed, save democracy

Priyanjana Bengani   Partisan local news networks will collaborate

Wilson Liévano   Diaspora journalism takes the next step

Nicholas Thompson   The year AI actually changes the media business

Danielle K. Brown and Kathleen Searles   DEI efforts must consider mental health and online abuse

Laura E. Davis   The year we embrace the robots — and ourselves

Christina Shih   Shared values move from nice-to-haves to essentials

Snigdha Sur   Newsrooms get nimble in a recession

Rachel Glickhouse   Humanizing newsrooms will be a badge of honor

Al Lucca   Digital news design gets interesting again

Gordon Crovitz   The year advertisers stop funding misinformation

Kaitlin C. Miller   Harassment in journalism won’t get better, but we’ll talk about it more openly

Francesco Zaffarano   There is no end of “social media”

Laxmi Parthasarathy   Unlocking the silent demand for international journalism

Sue Cross   Thinking and acting collectively to save the news

Michael W. Wagner   The backlash against pro-democracy reporting is coming

Stefanie Murray   The year U.S. media stops screwing around and becomes pro-democracy

Eric Holthaus   As social media fragments, marginalized voices gain more power

Joanne McNeil   Facebook and the media kiss and make up

A.J. Bauer   Covering the right wrong

Elite Truong   In platform collapse, an opportunity for community

Barbara Raab   More journalism funders will take more risks

Molly de Aguiar and Mandy Van Deven   Narrative change trend brings new money to journalism

Christoph Mergerson   The rot at the core of the news business

Jessica Maddox   Journalists keep getting manipulated by internet culture

Bill Grueskin   Local news will come to rely on AI

Burt Herman   The year AI truly arrives — and with it the reckoning

Lisa Heyamoto   The independent news industry gets a roadmap to sustainability

Sarah Marshall   A web channel strategy won’t be enough

Ryan Nave   Citizen journalism, but make it equitable

Brian Stelter   Finding new ways to reach news avoiders

Julia Beizer   News fatigue shows us a clear path forward

Jarrad Henderson   Video editing will help people understand the media they consume

Moreno Cruz Osório   Brazilian journalism turns wounds into action

Upasna Gautam   Technology that performs at the speed of news

Kerri Hoffman   Podcasting goes local

Jennifer Choi and Jonathan Jackson   Funders finally bet on next-generation news entrepreneurs

Nikki Usher   This is the year of the RSS reader. (Really!)

Joe Amditis   AI throws a lifeline to local publishers

Kavya Sukumar   Belling the cat: The rise of independent fact-checking at scale

Anika Anand   Independent news businesses lead the way on healthy work cultures

Richard Tofel   The press might get better at vetting presidential candidates

Bill Adair   The year of the fact-check (no, really!)

Doris Truong   Workers demand to be paid what the job is worth

Anthony Nadler   Confronting media gerrymandering

Mary Walter-Brown and Tristan Loper   Mission-driven metrics become our North Star

Surya Mattu   Data journalists learn from photojournalists

David Cohn   AI made this prediction

Valérie Bélair-Gagnon   Well-being will become a core tenet of journalism

Mar Cabra   The inevitable mental health revolution

Alan Henry   A reckoning with why trust in news is so low

Dominic-Madori Davis   Everyone finally realizes the need for diverse voices in tech reporting

Esther Kezia Thorpe   Subscription pressures force product innovation

Kirstin McCudden   We’ll codify protection of journalism and newsgathering

S. Mitra Kalita   “Everything sucks. Good luck to you.”

Sue Robinson   Engagement journalism will have to confront a tougher reality

Eric Thurm   Journalists think of themselves as workers

Eric Ulken   Generative AI brings wrongness at scale

Joshua P. Darr   Local to live, wire to wither

Sue Schardt   Toward a new poetics of journalism

Jesse Holcomb   Buffeted, whipped, bullied, pulled

Daniel Trielli   Trust in news will continue to fall. Just look at Brazil.

Gina Chua   The traditional story structure gets deconstructed

Martina Efeyini   Talk to Gen Z. They’re the experts of Gen Z.

Dana Lacey   Tech will screw publishers over

Emma Carew Grovum   The year to resist forgetting about diversity

Brian Moritz   Rebuilding the news bundle

Anna Nirmala   News organizations get new structures

Julia Angwin   Democracies will get serious about saving journalism

Kathy Lu   We need emotionally agile newsroom leaders

Janelle Salanga   Journalists work from a place of harm reduction

John Davidow   A year of intergenerational learning

Larry Ryckman   We’ll work together with our competitors

Sumi Aggarwal   Smart newsrooms will prioritize board development

Susan Chira   Equipping local journalism

Jim Friedlich   Local journalism steps up to the challenge of civic coverage