Markets in everything

… with apologies to Mark Perry

From the people who brought you the Iowa Electronics Markets, comes the swine-flu prediction market, that was started up just this week by the Iowa Electronic Health Markets.

Here's how the system works: Health-care experts are given 100 "swine dollars" to invest on a series of propositions. If they correctly predict the outcome, they win $1 per share. If they're wrong, they lose their investment. Shares can be traded at different prices as the market rolls along, until the trading deadline comes due and the accounts are settled. The price of the day should reflect the perceived probability for the investment outcome.

Unlike the political markets they operate, however, real money will not be used on predicting the possible outcomes of this potential pandemic. Do you think this might effect the trading? As we all know, people behave differently when spending money that isn't truly theirs.

Check it out, here.

H/T: MSNBC