confab.yahoo on prediction markets: Dec 13, 2006 - 5:30pm

Chris F. Masse December 13th, 2006

The David Pennock-endorsed event will be webcast at two connection speeds: 100k | 300k

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Hey, I overlooked that Yahoo! definition of what constitutes a “prediction market”:

A prediction market is like a stock market for ideas or information. The market rewards good information whether it comes from elites or the masses. Prediction markets have built a track record of besting pundits and pollsters when it comes to predicting everything from political elections to quarterly sales figures.

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My Take:

#1. “stock market”: Wrong. It’s a simplified futures market (as far as I can tell). However, Alex Kirtland said that the stock market analogy is better for the public. But I thought the confab workshop was to be filled with scholars and industry players. Does Yahoo! serve the wrong definition to the right people?

#2. “from elites or the masses”: Do the market makers bring the predictive power in? If yes, are they members of the elites or the masses?

#3. “besting pundits and pollsters”: Prediction markets versus polls have been documented by IEM. Does anyone know of comparative studies featuring prediction markets versus pundits?

#4. “predicting everything”: A blatant lie —I can’t believe that David Pennock writes such an idiotic statement. It makes him look like a charlatan —he is not, of course; he is a great scientist. Prediction markets only work if you have traders, and those traders come speculating only if the topic is of interest to them. There are many socially relevant prediction markets that will never see the light because exchanges will never be able to attract enough traders —CDA or MSR.

Anyway, happy workshop. I will monitoring it and count how many times the word “BetFair” is pronounced, and if it is low, as I suspect, I will come back here claiming that there’s a big, worldwide conspiracy going on in America to downplay the world’s #1 prediction exchange.