This article challenges the conventional belief amongst economists that "markets where traders risk their own money should produce better forecasts than markets where traders run no financial risk." In actuality, real money markets reflect more than past predicitive performance, they relfect an entire mass of social factors behind individual wealth, like financial status and willingness to take risks. Play-money prediction markets are based solely on track record and previous predictive performance and many systems use this model in addition to prize incentives based on rank to ensure players continue to buy and sell. The primary research of this paper is a study conducted to determine the level of accuracy sacrificed when using play-money compared to real-money prediction markets. The conclusion reached was that both markets were almost identical in accuracy.

It appears that though the predicitve power of these two real and play money markets are about equal, that the play-money one would actualy average a closer fit to Surowiecki's opinions about what constitutes a good market by eliminating the discouraging financial factor. This study is crucial in the examination of incentives as it attacks a noticible divide within the prediction market world.