I’ve developed a combinatorial betting tech that lets a few or many users edit an always-coherent joint probability distribution over all value combinations of some set of base variables. Far futures base variables might include the years of important tech milestones, population, wealth, or mortality values at particular future dates, etc. Each user edit would be backed by a bet, a bet invested in assets paying competitive interest/returns. This combo bet tech worked well in published lab tests, several firms have used it, and I’m now working with Consensus Point to deliver a robust commercial implementation. More on the tech here, here, and here.
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See the explainer from David Pennock, which we will link to, again, later on.
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Great news (in bold).
While I’d prefer a robust open source implementation (not necessarily at odds with “commercial”, though that word is ambiguous and could mean “proprietary”), I’m fairly convinced that the primitive technology currently available and implemented by exchanges is a far bigger problem than legal barriers, but that’s basically just repeating comments I made at http://www.midasoracle.org/2007/01/08/prediction-exchange-grid/#comment-517
OK.
While it is true that Intrade-style prediction markets have not taken off in countries where they are legal, and combinatorial markets will probably be the most valuable ones at some point, I don’t think there is a lot of evidence for that claim in the exchange context, Mike.
“Intrade-style prediction markets have not taken off in countries where they are legal”
BetFair do not offer these contracts, but they could. Then the British media would pick up them, and they would take off. It is a question of offer.
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I agree with Mike that prediction exchanges could offer a better technology. Look the effort that HubDub deployed. It has paid off. It is now the biggest play-money exchange behind HSX.
Jason, I don’t follow the caveat of “in the exchange context” — what is the non-exchange context, in particular for combinatorial markets, which require something to coordinate the combinatorial bets, whether that something is called an exchange or not.
I meant that combinatorial markets might be more immediately helpful in the corporate PM context. Intrade’s interface could be better, but it’s good enough that I don’t see how it’s more of an issue than the legal/regulatory problems. With Betfair, it has to be more of an interface issue, though just in terms of usability, not the lack of combinatorial markets.