ABC 20/20 — A good (but servile) explainer on the wisdom of crowds and the prediction markets
Chris F. Masse May 16th, 2008
ABC 20/20 featuring InTrade - (May 9, 2008)
Foretelling The Future: Online Prediction Markets — (4 pages in all)
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- Not a single word about InTrade-TradeSports fucking up its traders during the North Korea Missile episode.
- Although James Surowiecki is a great thinker overall, I’m not happy he served InTrade’s past forecasting successes in absolute terms —and not in terms of probabilities. That shows James Surowiecki can’t be the ultimate leader of the field of prediction markets. Robin Hanson, Justin Wolfers, Koleman Strumpf, Eric Zitzewitz, or even Emile Servan-Schreiber, would have not made that mistake.
- All prediction markets are not created equal. Spot that they go too far, saying terrorism prediction markets or earthquake prediction markets could serve a societal purpose. That is complete bullshit. That is pure hype. As I said yesterday, an analyst should check whether a given prediction market is really able of aggregating important information. Just because John Delaney wants to create a betting market to get money doesn’t mean that that given prediction market will be able to give sound forecasts. Otherwise, we would have prediction markets about future lottery outcomes and we would make a fortune out of that.
- Spot that they put the emphasis on the easy translation between the 0–100 prices and the 0–100 probabilities. That puts BetFair’s model (based on those damn digital/decimal odds) out of the picture.
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