BARACK OBAMA = NEXT US PRESIDENT OF THE UNITED STATES OF AMERICA

Chris F. Masse February 7th, 2008

LIKE HIM OR NOT, THIS IS THE 44th US PRESIDENT, ACCORDING TO THE PREDICTION MARKETS. GET USED TO IT.

#1. Explainer On Prediction Markets

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

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

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 times out of 100, the unfavored outcome will occur.

The value of a set of prediction markets consists in the added accuracy that these prediction markets provide relative to the other forecasting mechanisms, times the value of accuracy in improved decisions, minus the cost of maintaining these prediction markets, relative to the cost of the other forecasting mechanisms. According to Robin Hanson, a highly accurate prediction market has little value if some other forecasting mechanism(s) can provide similar accuracy at a lower cost, or if very few substantial decisions are influenced by accurate forecasts on its topic.

More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- Prediction Market Science

- The Midas Oracle Explainers On Prediction Markets

- All The Midas Oracle Explainers On Prediction Markets

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.

2008 US Elections

InTrade

2008 US Electoral College

- This is a dynamic electoral map, which is up to date. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version. - [Feed readers: Download this webpage to visualize this InTrade widget.]

- This is a dynamic electoral map, which is up to date. - [Feed readers: Download this webpage to visualize this InTrade widget.]

Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

- All the charts below are also dynamic —they update themselves each time you open this webpage.

2008 US Presidential Election Winner - Individual

2008 US Presidential Election Winner - Political Party

2008 US Congressional Elections Winner - Political Party

2008 US Senate Control

2008 US House Of Representatives Control

Sources:
- The dynamic, compound prediction market charts are from InTrade .COM.
- The individual charts, however, are from InTrade .COM v2. We will later transition to the charts from InTrade .COM when the charting quality of their widgets improves.
- We are also waiting to be able to hot-link to the advanced charts of InTrade .COM.

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