Prediction Markets + Market Predictions = Collective Forecasting That Pays Off
Because the decision to select a running mate is a decision made in secrecy, with many (personal or else) factors we are not aware of, and many things we are not fully informed about. Barack Obama and John McCain’s minds are not that open —whatever you can read in the Press from the so-called campaign insiders. That’s the typical kind of prediction markets that traders and probability seekers should not approach.
So, I won’t cover InTrade and BetFair’s VP prediction markets, here.
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Niall O'Connor on We interrupt this report to bring you some Jazz.Niall O'Connor on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]
This is dumb. Cover them if something interesting happens. Maybe your theory will turn out to be wrong. Anyhow: Although the decision is made in secrecy, the Presidential nominees have a number incentives which we have plenty of information about. Specifically:
* They want someone who will balance their tickets in terms of geography, race and class.
* They want someone who will help with weak areas of their campaigns.
* They want someone who will be a good campaign surrogate — giving good speeches and attacking the opponents effectively.
* They want to avoid a VP who will de-motivate or offend the base.
* They want to avoid someone with a bunch of skeletons in the closet such as angry ex-wives, out-of-wedlock kids, etc.
* Etc etc.
Anyhow, I don’t see any reason to ignore these markets in case something interesting happens. I read Midas Oracle so that I don’t *have* to read a whole bunch of other websites!
@Bo: Great, a polémique.
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The common ground is that:
- I should cover them;
- but with the mention that I don’t think they can aggregate all info.
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Surely we agree that the error rates for such a secretive process would be quite high, but wouldn’t the marginal value of a predicition market in such cases, relative to more transparent processes, be higher as well?
There’s no balance in looking at one side of the ledger (in this case, the risk side, ignoring the reward side).