Prediction market roll up
View Patent ↗Various problems currently exist in the operation of using prediction markets for corporate forecasting. One of these problems we address is the problem related to the “consistency and consolidation of metrics”. We hierarchically structure and link sets of markets traded using an automated market maker and dynamically balance markets.
1. A method of managing a prediction market, where the prediction market includes a lower level market and a summary market, where the summary market depends nonexclusively on the lower level market, the method comprising:
receiving data representing a trade in a first market that is one of the lower level market or the summary market;
using an automated market maker to
revise a first metric associated with the first market responsive to the trade to obtain an revised first metric,
revise a second metric associated with the second market responsive to both the adjusted first metric and mathematical dependence of the summary market on the lower level market, to obtain an revised second metric; and
generating a display representing the revised second metric.
2. The method of claim 1 , where the first market is the lower level market and the second market is the summary market.
3. The method of claim 2 , where:
the trade is a trade in the lower level market;
using the automated market maker includes using the automated market maker to revise the second metric associated with the summary market by summing the revised first metric with a third metric representing a second lower level market, to obtain the revised second metric as a measure of the summary market; and
generating the display includes generating the display to represent the summary market as a function of the trade in the lower level market.
4. The method of claim 2 , further comprising forecasting an event associated with the summary market responsive to the revised second metric, where the event is forecasted in dependence on the trade in the lower level market.
5. The method of claim 1 , where the first market is the summary market and the second market is the lower level market.
6. The method of claim 5 , where:
the trade is in the summary market;
using the automated market maker includes using the automated market maker to revise the second metric associated with the lower level market by scaling the second metric in dependence upon a proportional dependence of the summary market upon lower level market, to obtain the revised second level market as a measure of the lower level market; and
generating the display includes generating the display to represent the lower level market as a function of the trade in the summary market.
7. The method of claim 6 , further comprising forecasting an event associated with the lower level market responsive to the revised second metric, where the event is forecasted in dependence on the trade in the summary market.
8. The method of claim 7 , where the lower level market is a first lower level market, and where using the automated market maker includes using the automated market maker to scale a third metric representing a second lower level market in dependence upon a proportional dependence of the summary market upon the second lower level market, to obtain a revised third metric as a measure of the second lower level market, the method further comprising generating the display to represent each of the revised second metric and the revised third metric.
9. The method of claim 1 , where each metric is a currency price.
10. The method of claim 1 , further comprising generating a display with separate display values respectively representing the revised first metric and the revised second metric.
11. A method of managing a prediction market, where the prediction market includes a lower level market and a summary market, where the summary market mathematically depends on the lower level market, the method comprising:
receiving data representing a trade in a first market that is one of the lower level market or the summary market;
using an automatic market maker to reprice the first market in response to the trade;
using the automated market maker to reprice a second market that is the other of the lower level market and the summary market, in dependence upon the mathematical relationship between the summary market and the lower level market; and
using the automatic market maker to update the prediction market to represent the first and second markets as repriced.
12. The method of claim 11 , further comprising generating a forecast responsive to the second market as repriced.
13. The method of claim 11 , where the summary market mathematically depends on the lower level market as the sum of a price of the lower market and one or more additional markets, the second market is the summary market, and the second market is repriced by generating a sum representing the first market as repriced and a third market.
14. The method of claim 11 , where the lower level market is mathematically related to the summary market as representing a portion of the summary market, where the second market is the lower level market and is repriced by generating a proportional adjustment to the lower level market based on repricing of the summary market.
15. The method of claim 14 , further comprising repricing a third market that is also mathematically related to the summary market as representing a portion of the summary market, by generating a proportional adjustment to the third market based on repricing of the summary market.
16. The method of claim 15 , further comprising generating a display with respective display values for each of the second market as repriced and the third market as repriced, each as a separate function of repricing of the summary market.
17. The method of claim 11 , further comprising using the market maker to automatically reprice the first market based upon trades in the second market, and vice-versa.
18. The method of claim 11 , further comprising generating a display with respective display values for each of the repriced first market and the repriced second market.