In the prediction markets the traders can give their assessment of whether a result will be replicated or not. For each study, a separate prediction market is run to predict the outcome of the replication. In each market one asset is traded whose payoff depends on whether the result/hypothesis will be replicated or not.
The markets will open for trading on April 15 20:00 CET (Central European Time) and close on April 26 20:00 CET. If you encounter any issues, please contact us.
Once your account is created, you can enter the market by visiting http://www.replicatescience.com/.
Once you begin trading in the replication markets system, you have a trader ID. Results from the market system will be identified only by this trader ID and linked to your survey responses. In our analysis we will therefore not be able to identify you personally. Of course, we will keep all data confidential and under no circumstances data will be given to external parties.
All Replicator Staff — faculty, research assistants and technical staff who are conducting the replications — will (a) not be eligible to trade in the markets and also (b) are expected to keep themselves as uninformed as possible about activity in the markets until their own replications have been finished. A statement of how we describe this obligation to Replicator Staff is available here.
You can trade on the outcome of each of the 18 replication studies in a web-based market interface. This webpage (www.sciencepredictionmarkets.com) provides information on the 18 studies (and the specific hypotheses therein) which are to be replicated.
Your initial endowment is 100 Tokens. You can trade in as many of the 18 markets as you want to. However, any residual Tokens not invested will have no value after markets have closed.
Once you have identified a market (study) that you would like to trade in, click on the corresponding button to access it.
Then you will see two possibilities to trade:
For each market a computerized market maker provides liquidity by implementing a logarithmic market scoring rule following Hanson (2007).* There are no transaction costs and investments are anonymous to other participants.
For each trade you have to “invest” Tokens. Increasing (decreasing) your position with Tokens will move its price up (down). The Tokens invested are translated into shares depending on the market price. If you adjust your existing position in an asset toward zero, Tokens are put back into your Token balance and become available for trading in other assets.
Shares held in the end award the USD equivalent of 1 Token (\$.50) if the asset is tied to an event that turns out to be true. Click here for learning more about the market maker and how prices change depending on Tokens invested.
You can track all your positions in the table “Trade”. For each asset, you can see the current prices (“Price”), how many shares you hold in a particular asset (“Shares Held”), and the current value of your position in Tokens (“Investment Value”).
The investment value of a position is calculated as the number of Tokens you would receive by immediately closing your position in the asset. If you have positive (negative) holdings in an asset and the price goes up, the investment value of your position will increase (decrease). If you have positive (negative) holdings in an asset and the price goes down, the investment value of your position will decrease (increase).
Therefore, the investment value of a position is not the same as the expected USD equivalent of your shares after the markets have closed and the replication studies are completed.
Remember that all Tokens which are not invested will have no value after the markets have closed. This rule should motivate you to invest actively in assets.
All assets will be settled when the replication studies have been completed according to the following rule:
Each asset has a clear event outcome determining its terminal value. If the hypothesis is replicated, you receive 1 Token (corresponding to \$.50) for each positive number of shares you hold, but nothing for negative share holdings. If the hypothesis is not replicated, you receive 1 Token (corresponding to \$.50) for each negative number of shares you hold, but nothing for positive share holdings.
Payouts are capped at 200 US-Dollars per subject and will be paid out in November 2015. If a particular replication study is not finished by that time, the financial payoffs from that event will be determined by the market price at the time of market closing.
* Hanson R. 2007. Logarithmic market scoring rules for modular combinatorial information aggregation. Journal of Prediction Markets 1(1): 3-15.