# Are Prediction Markets Good Forecasters?

> Prediction markets have beaten polls in studied elections, with the Iowa Electronic Markets closer to outcomes than 74% of polls. They fail under thin…

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- **Updated:** 2026-10-16
- **Category:** research
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## Key data

- **Cluster:** Markets & infrastructure
- **Sources:** 3
- **Updated:** 2026-10-16

Prediction markets have beaten polls in studied elections, with the Iowa Electronic Markets closer to outcomes than 74% of polls. They fail under thin liquidity, information vacuums, extreme events and biases, and most 2026 volume sits in sports, so usefulness varies by question.

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## Sources

1. [Accuracy and Forecast Standard Error of Prediction Markets*](https://www.biz.uiowa.edu/faculty/trietz/papers/forecasting.pdf)
2. [How Accurate Are Prediction Markets? Academic | TradeAlgo](https://www.tradealgo.com/trading-guides/prediction-markets/prediction-market-accuracy)
3. [Are Prediction Markets Good for Anything?—Asterisk](https://asteriskmag.com/issues/14/are-prediction-markets-good-for-anything)

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