Having access to an accurate probability about whether the Olympics will tell local hotels about how important it is to have a lot of beds available
Aside from changing pricing on the rooms (which is already an implicit prediction market on the Olympics) I’m not really sure what the hotels are supposed to do. Individual hotels can’t exactly increase supply overnight. (Unlikely your example with Airbnb)
If you set a price for a room months in advance knowing the likely demand for the room at the time it’s used is very useful.
Generally, running the Olympics comes with a lot of local economic activity to make the event happen and various actors benefit from being able to plan ahead.
Generally, running the Olympics comes with a lot of local economic activity to make the event happen and various actors benefit from being able to plan ahead.
I agree with this, I just don’t think hotel rooms are a particularly good example since supply is fixed there is little hotel operators can do with knowledge of the probability of the event. (They can “change” prices, but prices are effectively driven my a market equilibrium (which is going to effectively be a prediction market on the Olympics going ahead))
The bed market is similar to a prediction market but less efficient then a good prediction market. If people buy hotel beds and then resell them that adds a lot of overhead that you don’t have if that market function is done through a good prediction market.
Aside from changing pricing on the rooms (which is already an implicit prediction market on the Olympics) I’m not really sure what the hotels are supposed to do. Individual hotels can’t exactly increase supply overnight. (Unlikely your example with Airbnb)
If you set a price for a room months in advance knowing the likely demand for the room at the time it’s used is very useful.
Generally, running the Olympics comes with a lot of local economic activity to make the event happen and various actors benefit from being able to plan ahead.
I agree with this, I just don’t think hotel rooms are a particularly good example since supply is fixed there is little hotel operators can do with knowledge of the probability of the event. (They can “change” prices, but prices are effectively driven my a market equilibrium (which is going to effectively be a prediction market on the Olympics going ahead))
The bed market is similar to a prediction market but less efficient then a good prediction market. If people buy hotel beds and then resell them that adds a lot of overhead that you don’t have if that market function is done through a good prediction market.