Dan Schwarz We all know they’re casinos. It’s time to look at the data behind the froth. In 2007, Nobel laureates Kenneth Arrow, Daniel Kahneman, and other notable scholars published a statement arguing that prediction markets could “substantially improve public and private decision-making.” The theoretical foundations were deep. Friedrich Hayek had argued in 1945 that markets aggregate dispersed, local, and tacit knowledge through the price system better than any central planner. In 2000, Georg...