Comments on: Prediction Markets in the Classroom: Inkling Markets http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/ Prediction Markets, etc. Thu, 02 Feb 2012 23:13:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Prediction market journalism should not be practiced by… the prediction market people… but by the vertical experts —with the help of the prediction market people. | Midas Oracle .ORG http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18612 Prediction market journalism should not be practiced by… the prediction market people… but by the vertical experts —with the help of the prediction market people. | Midas Oracle .ORG Wed, 14 May 2008 19:41:36 +0000 http://www.midasoracle.org/?p=6818#comment-18612 [...] Surprisingly, Koleman Strumpf’s story ranks #5. Not that I’m [...] [...] Surprisingly, Koleman Strumpf’s story ranks #5. Not that I’m [...]

]]> By: Chris F. Masse http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18577 Chris F. Masse Tue, 13 May 2008 09:58:30 +0000 http://www.midasoracle.org/?p=6818#comment-18577 @David Pennock: Good synthesis. Let's see whether the people above agree. @David Pennock: Good synthesis. Let’s see whether the people above agree.

]]> By: David Pennock http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18571 David Pennock Mon, 12 May 2008 19:16:24 +0000 http://www.midasoracle.org/?p=6818#comment-18571 Chris asked me to comment, so here goes: I agree with Michael and Bo and Koleman. One way to think of the market maker is as if it is just another trader, albeit an extremely active one. Thus the comparison of number of transactions does have some meaning, if not a perfect correspondence. Chris asked me to comment, so here goes: I agree with Michael and Bo and Koleman.

One way to think of the market maker is as if it is just another trader, albeit an extremely active one. Thus the comparison of number of transactions does have some meaning, if not a perfect correspondence.

]]> By: medemi http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18517 medemi Sun, 11 May 2008 19:39:31 +0000 http://www.midasoracle.org/?p=6818#comment-18517 I don't see why someone would invent a concept like "market activity", which tells you nothing, if there is a definition available at all, then try to measure it using different methods. - We have a valid concept, it's called market liquidity. - Tbh, I don't see what this page is about. I was hoping it would be about reliability of predictions markets, but that turned out to be wishful thinking, I think. I don’t see why someone would invent a concept like ”market activity”, which tells you nothing, if there is a definition available at all, then try to measure it using different methods.
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We have a valid concept, it’s called market liquidity.
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Tbh, I don’t see what this page is about. I was hoping it would be about reliability of predictions markets, but that turned out to be wishful thinking, I think.

]]> By: Chris F. Masse http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18489 Chris F. Masse Sat, 10 May 2008 15:38:29 +0000 http://www.midasoracle.org/?p=6818#comment-18489 @Michael Giberson: Excellent synthesis and excellent suggestion. Well... still waiting for David Pennock's input... @Michael Giberson: Excellent synthesis and excellent suggestion. Well… still waiting for David Pennock’s input…

]]> By: Michael Giberson http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18487 Michael Giberson Sat, 10 May 2008 14:50:08 +0000 http://www.midasoracle.org/?p=6818#comment-18487 I agree with Koleman that the number of transactions is a reasonable measure of market activity <em>and</em> with Bo that a direct comparison of number of transactions in CDA and MSR isn't an apples-to-apples comparison.  But it is only a very generic indicator, and for more understanding we'd probably want to look at number of traders in each market, size of transactions, and so on. . I'm not sure the issue is important enough to warrant deeper study, but such a study could readily be done experimentally.  Alternatively, a comparison of trading in relatively similar markets at, say, Inkling and NewsFutures might show how number of trades per market is associated with market efficiency in MSR and CDA markets.  But I can imagine a lot of problems in getting a clean comparison in the latter approach; an econ  lab experiment could do the trick. I agree with Koleman that the number of transactions is a reasonable measure of market activity and with Bo that a direct comparison of number of transactions in CDA and MSR isn’t an apples-to-apples comparison.  But it is only a very generic indicator, and for more understanding we’d probably want to look at number of traders in each market, size of transactions, and so on.
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I’m not sure the issue is important enough to warrant deeper study, but such a study could readily be done experimentally.  Alternatively, a comparison of trading in relatively similar markets at, say, Inkling and NewsFutures might show how number of trades per market is associated with market efficiency in MSR and CDA markets.  But I can imagine a lot of problems in getting a clean comparison in the latter approach; an econ  lab experiment could do the trick.

]]> By: Chris F. Masse http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18486 Chris F. Masse Sat, 10 May 2008 13:13:07 +0000 http://www.midasoracle.org/?p=6818#comment-18486 @Chris F. Masse: Chris, take a look at this previous post: http://www.midasoracle.org/2007/04/09/googlery-bo-cowgills-boss-misunderstands-the-wisdom-of-crowds/ @Chris F. Masse: Chris, take a look at this previous post:
http://www.midasoracle.org/2007/04/09/googlery-bo-cowgills-boss-misunderstands-the-wisdom-of-crowds/

]]> By: Koleman http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18477 Koleman Sat, 10 May 2008 07:32:54 +0000 http://www.midasoracle.org/?p=6818#comment-18477 Bo: Thanks for the props--I have a much better appreciation of the difficulties of running a PM now (though I am sure your job was far tougher since all my traders were in one building!) Good point on CDA/MSR, but I still think the comparison is appropriate.  When someone makes a trade in a MSR, they are willing to trade at the prevailing price. There are likely to be many others who do not trade, but would be willing to do so if the price were quite different. These latter traders are much like those who place limit orders in a CDA, and just like with the CDA they do not get included in the transaction tally. Regardless of the microstructure, the number of transactions is a reasonable measure of the market activity. Bo:

Thanks for the props–I have a much better appreciation of the difficulties of running a PM now (though I am sure your job was far tougher since all my traders were in one building!)

Good point on CDA/MSR, but I still think the comparison is appropriate.  When someone makes a trade in a MSR, they are willing to trade at the prevailing price. There are likely to be many others who do not trade, but would be willing to do so if the price were quite different. These latter traders are much like those who place limit orders in a CDA, and just like with the CDA they do not get included in the transaction tally.

Regardless of the microstructure, the number of transactions is a reasonable measure of the market activity.

]]> By: Chris F. Masse http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18476 Chris F. Masse Sat, 10 May 2008 05:52:10 +0000 http://www.midasoracle.org/?p=6818#comment-18476 <p>Yes, it's "cool".</p> <p>-</p> <p>Good point, Bo. I never thought of that point. Sounds true. Mike, Jason, any comment?</p> <p>-</p> Yes, it’s “cool”.

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Good point, Bo. I never thought of that point. Sounds true. Mike, Jason, any comment?

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]]> By: Bo http://www.midasoracle.org/2008/05/09/prediction-markets-in-the-classroom-inkling-markets/#comment-18474 Bo Sat, 10 May 2008 03:06:27 +0000 http://www.midasoracle.org/?p=6818#comment-18474 Pretty cool success! Congratulations Koleman. Just a heads up on making comparisons between stats from MSR markets (Inkling) and CDA markets (internal Google): Don't compare the number of transactions. It isn't an apples-to-apples comparison. In MSR, every buy or sell order is automatically matched by the market maker. Each time someone submits an order, that's a new transaction. In the CDA market, some orders to buy or sell are never matched by other players -- typically because of disagreements over the proper price. These unmatched orders do not count as "transactions" even though users have been actively participating. Bo Pretty cool success! Congratulations Koleman.

Just a heads up on making comparisons between stats from MSR markets (Inkling) and CDA markets (internal Google): Don’t compare the number of transactions. It isn’t an apples-to-apples comparison.
In MSR, every buy or sell order is automatically matched by the market maker. Each time someone submits an order, that’s a new transaction. In the CDA market, some orders to buy or sell are never matched by other players — typically because of disagreements over the proper price. These unmatched orders do not count as “transactions” even though users have been actively participating.
Bo

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