[…-] Outperforming Taiwan’-s polls shouldn’-t be hard. They’-re notoriously bad as a forecast of election outcomes. In late 2006, for example, many media polls underrated the pro-independence party’-s support – a recurring problem. Taiwan’-s prediction markets did a much better job of estimating vote shares (the island’-s two markets both called the Kaohsiung mayoral election wrong, but that contest was a statistical dead heat). “-Most opinion polls usually have 20 to 30% ‘-no answer’-,”- said Lin Jih-wen, director of the Center for Prediction Markets. “-We don’-t have missing data or a sampling bias, that’-s our strength.”-
The market has now picked the strong likelihood of victory by the China-friendly candidate Ma Ying-jeou. Time will tell if it’-s got the right guy. But even if it doesn’-t, the markets’- enthusiastic reception shows how Asia – like the US and Europe – has embraced such markets as a powerful fortune-telling tool.
A “-powerful fortune-telling tool”-? Jesus.
“-Outperforming”- the Taiwanese advanced indicators which they are feeding on? Humm…-
[Mike Giberson will write a comment, below, reminding me of Prof Koleman Strumpf’-s work (PDF file) showing that the historical prediction markets were accurate enough, even though the scientific polls were not invented yet. Yes, I know of that, Mike, but I still don’-t get whether it’-s a puzzle or a mystery. …- Do you?]
Read the previous blog posts by Chris F. Masse:
- Business Risks & Prediction Markets
- Brand-new BetFair bet-matching logic proves to be very controversial with some event derivative traders.
- Jimmy Wales accused of editing Wikipedia for donations.
- What the prediction market experts said on Predictify
- Are you a MSR addict like Mike Giberson? Have nothing to do this week-end? Wanna trade on a play-money prediction exchange instead of watching cable TV? Wanna win an i-Phone?
- The secret Google document that Bo Cowgill doesn’t want you to see
- BetFair’s brand-new matching-bet logic is endorsed by the Chairman of the Midas Oracle Advisory Board.