Prediction Markets Output Event Outcome Probabilities.

Prediction Markets

Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out... Intelligence in, intelligence out...

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 60 times out of 100, the favored outcome will occur; and 40 time out of 100, the unfavored outcome will occur.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

Midas Oracle wants you to set your screen resolution very high.

Chris F. Masse August 28th, 2008

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  • Set the screen resolution of your PC at 1600 x 1200 pixels or more.
  • You will probably have to augment the size of the font(s) used by your browser and your other software.

That way, you will have more things on your screen.

And you will enjoy our extended horizontal menu bar, present on top of every Midas Oracle webpage. More menu choices means more opportunities for the web visitors to discover the prediction markets. :-D Which is good for all the prediction market people and organizations listed on those webpages. :-D

InTrade, TradeSports, BetFair, TradeFair, IEM, HubDub, NewsFutures, HSX = “Bet Exchange Services”

Chris F. Masse August 28th, 2008

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I like that term.

Sorry for the brievety of this post, and for the un-interestingness of the link.

A noun, a verb, and POW

Chris F. Masse August 28th, 2008

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John McCain will announce soon who will be the Republican vice presidential nominee.

Reading the Press this early Thursday morning does not give any insider’s clues.

New York Times

Politico

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Price for 2008 Republican VP Nominee (others upon request)(expired at convention) at intrade.com

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Gambling Commission and DCMS stance on the Alderney Gambling Control Commission, a regulator which condones its licensees’ unlawful behaviour

Caruso August 27th, 2008

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This is a follow up to my Alderney Gambling Control Commission article.

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To date I have emailed the above article to both an AGCC lawyer to whom I spoke while researching the matter (at his request), and also the general contact address of the AGCC. On neither occassion did I receive any response.

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Since the government has whitelised Alderney as an acceptable jurisdicion for advertising priviledges in the UK, I thought it might be useful to inform the relevant parties of the situation as described in my article. As such, I emailed the following to both the DCMS and the Gambling Commission:

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Dear Sirs,

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I am emailing this to both the DCMS and the Gambling Commission, as I am unsure who is the most appropriate recipient. I am also sending a copy to the AGCC.

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Regarding the matter of the whitelisting of the Alderney Gambling Control Commission:

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http://www.culture.gov.uk/what…../3310.aspx

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The whitelist entitles operators under these jurisdictions to advertise in the United Kingdom.

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The Alderney Gambling Control Commission recently issued a decision on a dispute between a player and an Alderney operator, one PKR Casino. I have written an article on the matter to which I’ll provide a link at the bottom of this email at which you will be able to access all relevant details. However, in summary: the AGCC found in favour of the operator, where the operator had confiscated funds from a player who had not broken any rules. The AGCC confirmed, in its findings, that the player had not broken any rules, but maintained that the operator was entitled to withhold funds notwithstanding.

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This has set a precedent for all players of Alderney-based online gambling operations, a precedent which effectively ensures that no player funds, legitimately earned through a strict observance of all rules, are safe, on the basis that the AGCC will not require their licensees to enforce payment under such conditions; moreover, they will support their licensees’ right to confiscate such legitimately-earned funds.

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These casinos, under the jurisdiction of the Alderney Gambling Control Commission, have full entitlement to advertise in the United Kingdom, and as such, the funds of United Kingdom residents can be, and have already been, put in what is surely to be considered unacceptable jeopardy.

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My article can be read here:

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(link as above)

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What is your stance on the granting of advertising priviledges to a licencing jurisdicion, such as Alderney, which does not require that its licensee operators pay their players in full, where those players have broken no rules and have as such fullfilled all rules of the written contract? Is it acceptable that players in the UK be placed in the jeopardy that the Alderney jurisdiction represents? Can whitelist priviledges be revoked under such circumstances?

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Yours Faithfully,

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Etc

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To date, the Gambling Commission has informed me it’s none of their business, and I have heard nothing from the DCMS.

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Both legal and general support departments of the Alderney Gambling Control Commission have failed to respond to any of my emails.

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This, good people, is “governmental regulation”.

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This is what the citizens of the United States Of America can expect of their “regulators”, if and when online gambling gets legalised in their country.

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Let’s hope it never happens, for their sake.

Predictify gets the X Groups concept right.

Chris F. Masse August 27th, 2008

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#1. X Groups

Predictify is unveiling a two-way interaction between their prediction platform and the blogs out there.

  1. FROM THE BLOGS TO PREDICTIFY: Number one, there is now a customized prediction widget that bloggers can embed in their blog posts so that their readers can vote within each blog post —without leaving the blog.
  2. FROM PREDICTIFY TO THE BLOGS: Number two, there is now a trackback widget that bloggers can embed in their blog posts so that the blog readers can click and be connected to relevant questions on Predictify, based on the content in that particular post. As soon as one of the blog readers clicks a highlighted question, that question will have (on the Predicitif webpage) a trackback to the blog post —theoretically pulling traffic from Predictify to that blog. The first problem with this second feature is that only the most popular trackback will be published on the particular Predictify webpage, as I understand it. I don’t see how bloggers could be interested if there is no guarantee that their trackback will actually appear. The second problem is that we don’t know whether Predictify abides by the “do follow” policy, which is a way for a website to injects Google PageRank juice to the website it links to. (The opposite policy is called “no follow”.) Only the “do follow” approach would get bloggers interested in that scheme. Predictify should clarify that.
  3. UPDATE: All the trackbacks will appear. They will be sorted by popularity. And, yes, Predictify has a “do follow” policy. :-D

#2: Social Networking

I’m told that Predictify will soon unveil a FaceBook application. We will see whether it’s Predictify working on FaceBook or Predictify woking with FaceBook. See the difference? (YooPick works on FaceBook, not with FaceBook.)

A famous VC is sneaking in at night on HubDub to test the waters by himself.

Chris F. Masse August 27th, 2008

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Fred Wilson

I have spotted other famous business people, hidden behind pseudonyms.

INTRADE-TRADESPORTS CEO JOHN DELANEY CENSORS CNBC ON YOUTUBE.

Chris F. Masse August 27th, 2008

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- HE CENSORS THE END OF THE FIRST CNBC VIDEO SEGMENT TO FIT HIS MARKETING AGENDA.

- HE ORDERS THAT THE SECOND CNBC VIDEO SEGMENT NOT TO BE UPLOADED ON YOUTUBE.

THE PROOF OF THE CENSORSHIP:

YouTube video (whose last part was censored by InTrade-TradeSports CEO John Delaney - PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

PLEASE, SOMEBODY, DO UPLOAD THE FULL VIDEO SEGMENT ON YOUTUBE, UNCENSORED, AND HIT ME WITH ITS URL. I’LL RE-EMBED IT FOR EVERYONE TO SEE. THERE IS NO CENSORSHIP ON MIDAS ORACLE. WE ARE NEITHER IN CHINA NOR IN IRELAND. WE ARE FREE WORLD’S CITIZENS. WE WANT TO SEE THE NAKED TRUTH, NOT DOCTORED TAPES.

The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

APPENDIX: CNBC video + CNBC video #2

APPENDIX: THE ULTIMATE THING THAT TRADESPORTS-INTRADE CEO JOHN DELANEY WANTED TO CENSOR BUT COULDN’T THANKS TO MIDAS ORACLE.

“PREDICTION MARKETS” IS SUGGESTION #2 AT GOOGLE WEB SEARCH FOR THE “PREDICTION” QUERY.

Chris F. Masse August 27th, 2008

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Technical Note: I was logged in, but I got the same results when I was not logged in.

How do InTrade’s prediction markets work, and are they really accurate?

Chris F. Masse August 27th, 2008

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Thanks to the InTrade person who uploaded the first CNBC segment on YouTube, and fixed the initial technical problem.

I renew my asking for the second CNBC segment to be uploaded at YouTube, too. [If someone else than InTrade does it, please hit me with the YouTube URL. Thanks.]

My analysis:

  1. InTrade-TradeSports CEO John Delaney does a good job explaining the mechanism of the wisdom of crowds.
  2. They cut professor Justin Wolfers too short. It’s a nuclear disaster —once again. Justin Wolfers is an admirable and ultra friendly person, a great prediction market researcher, a good prediction market analyst, and a wonderful blogger, but his TV appearances are, so far, totally crappy. The guy needs to hire a publicist who will teach him to flatten his Australian accent and to talk straight and plain —to go to the point real quick.
  3. “It seems like someone at CNBC decided at some point that they would NEVER address the legality issue.” - Dixit Deep Throat.
  4. After the broadcast of the video shot in Ireland, the camera goes back to the TV set, and, at this point, the comments from the journalists and the guest (Steve Forbes) show that they still don’t understand fully the prediction markets. They don’t have the right facts, and their analysis is not crystal clear.
  5. Overall, a good explainer on the prediction markets —taken into account that CNBC is an entertainment media. For deeper explainers, see the Wall Street Journal, the Financial Times, or Midas Oracle.

YouTube video (the last part was censored by InTrade-TradeSports CEO John Delaney - PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

APPENDIX: CNBC video + CNBC video #2

UPDATE: The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

Now that Joe Biden is the Democratic vice president nominee, what to think of Justin Wolfers’ August 1st column for the WSJ?

Chris F. Masse August 26th, 2008

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- The good point is that he dealt well with the fact that the VP prediction markets fed on primary indicators that are less reliable than the ones used for the political elections.

- The bad point is that, at the time he wrote up his column, Virginia governor Tim Kaine was the favorite of the InTrade VP prediction markets. The others were, in decreasing order, Evan Bayth, Kathleen Sebelius, and then… Joe Biden. So, the critic reading his column today could say that the prediction markets are oversold to a gullible public and that a prediction market bubble ready to pop up is forming under our very nose.

- Now, we know that Barack Obama made his decision while vacationing in Hawaii (less than 2 weeks ago). That’s only from that date that the VP prediction markets started generating probabilistic predictions worth quoting. The trick is that Justin Wolfers (and the other prediction market analysts) didn’t know that, on August 1st. (PDF file)

- I don’t regret my decision not to publish about the VP prediction markets. I’d look like an idiot today.

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