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Rietz: Markets Might Predict Flu Patterns

The Iowa Electronic Markets, while most known for their political prediction markets, is now experimenting with a private flu market that would enable health-care professionals from different states to bet on when flu will erupt in the United States and how severe the outbreak will be. THOMAS RIETZ, a professor of finance, says the flu market may solve a thorny problem for the U.S. Centers for Disease Control, which until now had to watch flu outbreaks in a rearview mirror, too late for hospitals to prepare. "Flu is actually spread in a predictable pattern," Rietz says. "Kids get it first, parents stay home with the kids, and local clinics and nurses see it happening," he explains. "If we can get their information aggregated, hospitals can have an early warning." Academics now hope to move prediction markets beyond single future predictions to evaluation of many alternative, possible futures.

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