I am posting under BitShares section as I think it's most relevant, but if mods disagree, feel free to move it out of here.
It's interesting that several academics have taken an interest in prediction markets. This is the second such article I am reading within a week. Apparently, there is a wealth of scientific studies ready to be unleashed - they are just waiting for the right regulatory environment.
The prediction marketplace of BitShares is a little different from the prediction markets described here. These are similar to what InTrade was. Essentially, you buy shares in an 'Event', so say, "Bitcoin will trade above $2000 on MtGox at any moment on Dec 31st 2013". This is a well defined event which may or may not happen. People will 'bet' accordingly. It gets interesting where the predictive power is very good, e.g. Intrade's claim to fame was how it could predict the US election results to within a percentage point.
One main challenge is to this in a decentralized way. There shouldn't be a 'moderator' who will decide whether the said event took place or not. The so called 'Oracles' are a few years away at least, so that doesn't seem like an issue. Not sure how voting would work, i.e. how to incentivize people to vote the right way.
Also, is this something that should be incorporated into BitShares or a new DAC perhaps? Thoughts?