Category Archives: Prediction Markets

A Lesson for Water Quality Regulation: Listen to Prices in Credit Markets

EPA’s Ethanol Regulation provides an informative case study for the water industry about regulation.  Defining tradable rights in regulatory targets provides flexibility in achieving regulatory goals.  Probably equally as important is that the prices established in those markets provide immediate feedback on the economic impact of regulation.  Continue reading

Prediction Markets II: What Are Prediction Markets and Why Do They Work?

My earlier post on Prediction Markets discussed why prediction markets for the water industry.  They are the next frontier in water markets—information markets to improve planning and decision-making in the face of uncertainty about legislative and regulatory actions, political change, hydrology, project operations, litigation outcomes and water prices.  Currently, discussions of the future are often little more than unsubstantiated opinion.  The water industry can do better.  Continue reading

Prediction Markets I: Why Prediction Markets for the Water Industry

Water resource managers, planners, investors and other interested parties must make decisions in the face of uncertainty about a variety of factors.  How many times has a professional been in a meeting where a critical future factor was unknown and the discussion was basically an exchange of unsubstantiated opinion?  Would a credible quantification of the likelihood and consequence of the impact of future events facilitate better, faster and cheaper planning and decision-making? Continue reading