Optimization of information technology risk event prediction markets

Abstract

Information technology risk prediction markets have potential to identify the probabilities of risk events that are relevant to information systems. Prediction markets provide a bidding mechanism that allows large number of participants to compete for forming the most accurate predictions for future events. The accuracy of forecasts regarding the frequency, nature, and the form of cyber attacks is crucial for managers and various stakeholders to make effective decisions for investment in cyber defense systems. This paper identifies the key design elements that are involved in the development of a prediction market. The identification of the best configuration for the prediction markets helps organizations to build better defenses against cyber attacks.