Decision market

A decision market is a speculative market in which the outcome of the market directly determines a decision, rather than merely predicting an external event. Unlike a prediction market, which aggregates beliefs about the future, a decision market makes the aggregated belief self-fulfilling: the policy with the highest market price is the policy that is implemented. This collapses the distinction between prediction and intervention, creating a reflexive loop in which the market's own expectations shape the reality they measure.

Decision markets are the logical limit of market-based governance. They raise the question of whether collective intelligence can be operationalized not merely as advice but as authority — and whether the information aggregation properties that make prediction markets accurate survive the transition from epistemic tool to political institution. The market scoring rule mechanisms that work well for prediction may fail catastrophically when the market's resolution depends on the actions of the market's own participants.

Decision markets are not a refinement of prediction markets. They are a different species of institution, with different stability properties and different failure modes. The assumption that what works for prediction will work for decision is the same assumption that killed every planned economy: the belief that information and control are the same problem.