Comments on: The proper way to predict Obama’s electoral vote count http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/ Prediction Markets, etc. Thu, 02 Feb 2012 23:13:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chris F. Masse http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-23400 Chris F. Masse Wed, 18 Feb 2009 11:42:24 +0000 http://www.midasoracle.org/?p=11080#comment-23400 The truth about prediction markets http://www.midasoracle.org/2009/02/14/the-truth-about-prediction-markets/ The truth about prediction markets
http://www.midasoracle.org/2009/02/14/the-truth-about-prediction-markets/

]]> By: Prediction Markets — The Day After | Midas Oracle .ORG http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22592 Prediction Markets — The Day After | Midas Oracle .ORG Wed, 05 Nov 2008 09:08:20 +0000 http://www.midasoracle.org/?p=11080#comment-22592 [...] You might re-read Emile Servan-Schreiber’s post, which deals with interpreting prediction market prices as proba.... [...] [...] You might re-read Emile Servan-Schreiber’s post, which deals with interpreting prediction market prices as proba…. [...]

]]> By: Prediction Markets — The Day After | Midas Oracle .COM http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22581 Prediction Markets — The Day After | Midas Oracle .COM Wed, 05 Nov 2008 07:39:58 +0000 http://www.midasoracle.org/?p=11080#comment-22581 [...] You might re-read Emile Servan-Schreiber’s post, which deals with interpreting prediction market prices as proba.... [...] [...] You might re-read Emile Servan-Schreiber’s post, which deals with interpreting prediction market prices as proba…. [...]

]]> By: How to oversell InTrade’s predictive power | Midas Oracle .ORG http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22538 How to oversell InTrade’s predictive power | Midas Oracle .ORG Tue, 04 Nov 2008 00:15:47 +0000 http://www.midasoracle.org/?p=11080#comment-22538 [...] (which event derivative traders rely on to get informed), and they tell gullible reporters that InTrade has magical power. It’s total bullshit. The life of the InTrade prediction market on “Joe Biden as the VP [...] [...] (which event derivative traders rely on to get informed), and they tell gullible reporters that InTrade has magical power. It’s total bullshit. The life of the InTrade prediction market on “Joe Biden as the VP [...]

]]> By: Chris F. Masse http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22534 Chris F. Masse Mon, 03 Nov 2008 23:37:35 +0000 http://www.midasoracle.org/?p=11080#comment-22534 "We accurately predicted the outcome for every single state in the 2004 presidential election and all but one of the Senate races." http://www.moneyfoxs.com/blogging/intrade%E2%80%99s-chad-rigetti-talks-predictive-markets-political-polls-and%C2%A0xanax “We accurately predicted the outcome for every single state in the 2004 presidential election and all but one of the Senate races.”
http://www.moneyfoxs.com/blogging/intrade%E2%80%99s-chad-rigetti-talks-predictive-markets-political-polls-and%C2%A0xanax

]]> By: teaNoranges http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22527 teaNoranges Mon, 03 Nov 2008 19:38:29 +0000 http://www.midasoracle.org/?p=11080#comment-22527 Emile: Cody Stumpo at Intrade has been using a nice method to solve the problem you've come across. He uses all the historical state market prices to write down a 51x51 matrix of state-state correlations, and a 1x51 matrix of state volatilities. Then the 51 state prices are simulated out to election day. This gives a full probability distribution of EC votes for each candidate. His numbers coming from this method have tracked Nate Silver's pretty closely. Emile: Cody Stumpo at Intrade has been using a nice method to solve the problem you’ve come across. He uses all the historical state market prices to write down a 51×51 matrix of state-state correlations, and a 1×51 matrix of state volatilities. Then the 51 state prices are simulated out to election day. This gives a full probability distribution of EC votes for each candidate. His numbers coming from this method have tracked Nate Silver’s pretty closely.

]]> By: teaNoranges http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22526 teaNoranges Mon, 03 Nov 2008 19:28:33 +0000 http://www.midasoracle.org/?p=11080#comment-22526 I second Mr. Fortnow. If the prices are probabilities, the Intrade average value is the mean of the distribution of possible outcomes, e.g. the mean number of electoral votes for the candidates. That the first moment of the distribution follows so elegantly from prediction market data is a bit of miracle. How would one create such a number from polls? It's only possible by making several assumptions and/or running complex models. But back to Emile's point: All the prediction markets would be served by a standardized metric to assess how successful they were in retrospect. For individual markets this is easy, but for a set of correlated markets (e.g. the state races) it gets tricky. I second Mr. Fortnow. If the prices are probabilities, the Intrade average value is the mean of the distribution of possible outcomes, e.g. the mean number of electoral votes for the candidates.

That the first moment of the distribution follows so elegantly from prediction market data is a bit of miracle. How would one create such a number from polls? It’s only possible by making several assumptions and/or running complex models.

But back to Emile’s point: All the prediction markets would be served by a standardized metric to assess how successful they were in retrospect. For individual markets this is easy, but for a set of correlated markets (e.g. the state races) it gets tricky.

]]> By: Chris F. Masse http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22524 Chris F. Masse Mon, 03 Nov 2008 19:01:15 +0000 http://www.midasoracle.org/?p=11080#comment-22524 But what about the “leaning” method, prof Lance Fortnow? But what about the “leaning” method, prof Lance Fortnow?

]]> By: Lance Fortnow http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22519 Lance Fortnow Mon, 03 Nov 2008 17:35:00 +0000 http://www.midasoracle.org/?p=11080#comment-22519 The price-weighted average is not at all meaningless, it's the expected number of electoral votes the candidate would get when the prices are interpreted as probabilities. The price-weighted average is not at all meaningless, it’s the expected number of electoral votes the candidate would get when the prices are interpreted as probabilities.

]]> By: Chris F. Masse http://www.midasoracle.org/2008/11/03/the-proper-way-to-predict-obamas-electoral-vote-count/#comment-22518 Chris F. Masse Mon, 03 Nov 2008 17:31:44 +0000 http://www.midasoracle.org/?p=11080#comment-22518 <strong>Very smart post.</strong> I will have to think hard about that. And, yes, we need external opinions from our prediction market luminaries. Great, a polémique. It was badly needed. It was too calm, on Midas Oracle, recently. Very smart post. I will have to think hard about that. And, yes, we need external opinions from our prediction market luminaries.

Great, a polémique. It was badly needed. It was too calm, on Midas Oracle, recently.

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