Good news: The BetFair blog now features a prediction market column. — Bad news: Their columnist is an anonymous writer with long hair… and dubious skills.
Chris F. Masse February 15th, 2008
How low can BetFair go with their so-called blog? They are descending so low that they may find out oil in the Hammersmith undergrounds.
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Good news: They have a new columnist who tries to apply the prediction market approach. He even uses my two favorites tags, “prediction markets” and “prediction exchanges“. Good —although, the last one should be singular, not plural, in this context. (The “betting exchange” tag is discarded. Not smart.)
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Bad news:
#1. The writer hides behind a pseudonym, “The Predictor”. I don’t think it’s a good idea. With all the crap on the Web, readers are looking for serious articles from known experts. Of all 122 feeds I read daily, only one is published by an anonymous blogger —and that’s a small blog. And I can’t think of any serious, popular blog edited by someone who hides behind a pseudonym. People want to know who wrote what. They want to be able to check the bloggers’ background and disclosure.
[And "The Probabilist" would have been a better pseudonym, anyway. 
]
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#2. The author profile does not convey an image of professionalism:
The Predictor sits in a darkened room 20 hours a day, eats cheese and rice cakes, drinks only low fat lime soda, wears glasses, has long hair, and, above all else, is Betfair’s man on everything prediction markets. He is going to take us through the highs and lows of prediction markets past, present and even future. Be sure to keep an eye out for a fascinating insight into prediction markets and exchanges, what they can do, what they have done and why this can be useful to you.
Is this BetFair man educated in the fields of statistics, probabilities and economics? Has he a long experience in applying the prediction market approach? Is he an experienced prediction market blogger? That would be more interesting to know than to hear that their writer “eats cheese” and “has long hair”.
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#3. The clueless BetFair blog writer resorts to magic to explain historical pricing:
The polls themselves are often a key source of information that move the markets around, but on this occasion the markets were moving in direct opposition to what polling information was telling punters. The 8,000+ people trading on the market were getting it right to the most frightening accuracy.
This is a typical misunderstanding of how prediction markets work. Any trade is in fact informed/misinformed by either passion or some advanced indicator(s). In a cheap prediction market event study like this one, the writer (here, a British stringer working one ocean away from the topic at hand) suppresses evidence of how some advanced indicator(s) (e.g., some leaked polls) impacted trading, and declares that the BetFair magic was at work. That’s not journalism —that’s charlatanism. It’s mediocre. If the prices moved, it’s necessarily that some information hit the US wires. The fact that this British pseudo-journalist did not discover it does not mean that any hint didn’t exist. The prediction markets are simply information aggregation mechanisms (IAMs) —intelligence in, intelligence out; garbage in; garbage out. BetFair does help traders reverse their psychological arrow of time —remembering the future instead of the past. There’s no magic in prediction markets. There is causality —the prediction market journalist should discover it.
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TAKEAWAY: As a popular blogger who loves to link out to other resources on prediction markets, I regret to say that I won’t read this BetFair crap anymore and won’t link to it in the future. I bet that the serious people genuinely interested in prediction markets will find other blogs to satisfy their legitimate curiosity about James Surowiecki’s wisdom of crowds.
How come BetFair, which is a serious, legal and ethical prediction exchange, powered by so many great people in Hammersmith, can go so low? It’s unbelievable. There is a striking dichotomy between the excellence of their information technology team and the crassiness of the people who speak out for them.
[...] time I reviewed the BetFair blog, I yelled against the fact that their main writer on prediction markets went with an anonymous byline, “The Predictor” (whose only qualification was that he has “long hair” and [...]