[IMPORTANT NOTE: This present post is critical of one point expressed by Nigel Eccles, but, overall, I like this Scottish guy, and I enjoy HubDub's prediction markets a lot.]
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Quoting HubDub forecasts in news stories about future events will be as common as quoting stock prices in financial stories is today or (in the UK) quoting betting odds for political elections.
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Nigel,
my good friend,
Quit drinking the Scotch whisky and listen up 2 minutes.
I appreciate the formidable effort you made to start up HubDub and I am delightful its prediction markets are now well traded. In that perspective, HubDub is already a success. And I agree that many HubDub prediction market prices are meaningful.
However, I strongly disagree with the idea that, at one point in the future, the free world’s journalists and bloggers will rush to quote HubDub’s market-generated probabilities. Here’s why.
See, my good Scottish friend, you’re not the first fellow to tackle this problem. A guy named Emile Servan-Schreiber, with another fellow named Maurice Balick, created NewsFutures (a play-money prediction exchange quite similar to HubDub, except that HubDub uses MSR whereas NewsFutures uses CDA) in the year 2000 —at the time most contemporary prediction market people were still drinking their mother’s milk.
For the Midas Oracle readers who are just surfacing from an Afghan cave, Emile Servan-Schreiber is:
- a veteran of the prediction market industry;
- a well educated (PhD) and smart man;
- a gifted exchange executive, with a very good understanding of Internet usability;
- a successful entrepreneur (NewsFutures has been profitable for years);
- the only international prediction market expert (NewsFutures has clients in North-America, Europe, and Asia);
- the author of 2 academic papers on prediction markets (one of them established the predictive power of the play-money prediction markets);
- one of the most often interviewed prediction market people;
- well connected in the Academia (2 prediction market luminaries are on the NewsFutures scientific advisory board);
- the winner of a bet he made against Justin Wolfers;
- etc.
In other words, Emile Servan-Schreiber is far from being a moron.
Still, in 8 years of existence, NewsFutures’s prediction market prices have NEVER been quoted (over than occasionally) in the Mediasphere or the Blogosphere.
What makes you think that a cocky Scottish guy will be able to achieve what a smart Frenchman has miserably failed to achieve?
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The answer to Nigel Eccles’ mission statement resides in a collective effort from all prediction market people and organizations to favor the development of prediction market journalism.
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I fully appreciate the work that Emile and others have done but just because something hasn’t worked before doesn’t mean it can’t happen. Think of what Facebook has achieved in 3 years. If Zuckerberg had rocked up to a VC with a pitch that he wanted to create a way for people to create their own profile pages and connect with other people he would have been quickly shown the door. On paper it sounds a lot like Geocities and where is it now?
Sometimes ideas take time and a fresh perspective before they achieve their full potential. BTW I fully support the prediction market journalism initiative and I am trying to convert journalists one at a time!
@Jed Christiansen: Jed, I was talking about quoting play-money market prices. That will never happen —unless done by a specialized blogger.
@Nigel Eccles: I disagree with you.
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However, on the PMJ thing, I’m happy to hear what you say.
@Jed Christiansen: I want you and Giberson to think of a series of prediction markets about that. We would follow that issue on Midas Oracle once a month.
Hey Chris – Just a FYI – Nige’s not Scottish. He’s from Northern Ireland.