Using prediction markets to enable active learning in large groups

In this paper, prediction markets are presented as an innovative pedagogical tool which can be used to enable active learning in a wide range of disciplines, particularly in business and the social sciences. Prediction markets are a novel decision making tool which are designed to make forecasts about specific future events by using a market mechanism to aggregate the information held by a large group of traders about that event into a single value. When combined with Information Technology, the specific attributes of prediction markets means they are particularly useful in enabling active learning in large groups, where traditional pedagogical approaches can incur prohibitive administrative overheads.Our core insight is that prediction markets can be used to create decision scenarios which are linked to real-world events. The advantages of this approach in the cognitive and affective domains of learning are discussed, while the advantages to teaching staff are also described. The unique ability of prediction markets to enable active learning in large group teaching environments is explored. Building on this theoretical work, a detailed case study is presented describing how a prediction market can be deployed as a pedagogical tool in practice. Empirical evidence is presented demonstrating the effect prediction market participation has on learners in the cognitive and affective domains of learning. Finally, such suggestions for further research are presented.*This research was financed in part by a generous grant from NAIRTL.