Contingency markets are markets where

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

s are made to exchange funds contingent upon an event or combination of events or contingencies thereof.

Difference from prediction markets

Prediction market Prediction markets (also known as betting markets, information markets, decision markets, idea futures or event derivatives) are open markets where specific outcomes can be predicted using financial incentives. Essentially, they are exchange-trad ...

s are a subset of contingency markets and specialise in independent future events and are often exploited for the predictive side effect they produce. Complex contingencies only tend to occur in the

gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...

industry's implementations of prediction markets. Unlike prediction markets, contingency markets also support dependent future events. These are

a priori ("from the earlier") and ("from the later") are Latin phrases used in philosophy to distinguish types of knowledge, justification, or argument by their reliance on empirical evidence or experience. knowledge is independent from current ex ...

directly influenced or controlled by those interested in a particular outcome of an event.

References

{{Reflist Prediction markets Wagering

Difference from prediction markets

See also

References