Let’s rank institutions according to who has dealt first with the swine flu:
- Vertical media and local media — starting Tuesday, April 21, 2009
- Mass media, news aggregators, and user-created prediction markets (a la HubDub) — starting Friday, April 24, 2009
- Centrally managed prediction markets (a la InTrade) — starting Monday, April 27, 2009
External Link: Google News Timeline
Previously: Our “velocity” tag
At 21.33 London Time, the BBC reprted that; “The World Health Organization (WHO) has raised its alert level over swine flu from three to four – two steps short of declaring a full pandemic. ”
This has yet to make it on to the HubDub website slongside the pandemic betting market. Quite frnakly, this in not good enough!
This does seem to support the efficiency (what you call velocity) argument. Auctions are flexible, easy to create, and respond quickly to information, but I would bet that (even weakly incentivized) reporting schemes with simple model overlays would actually be more accurate in predicting infection rates here. These methods would be slower and more expensive though.
This market on HubDub currently states that there will be a Swine Flu pandemic in 2009;
http://www.hubdub.com/m39738
This market on HubDub currently states that there will not be any sort of Flu pandemic anywhere in the world in 2009;
http://www.hubdub.com/m21225/Will_we_see_a_global_influenza_pandemic_in_2009
The conclusions are pretty obvious….
Niall, do follow the most liquid of the 2 HubDub prediction markets.
Correction: Note that I deleted the adjective “vertical” applied to “news aggregators”. Indeed, those news aggregators take news from local media, vertical media, blogs, agencies, and mass media.
Chris
It is not a question of my personal opinion, but rather, what the existence of two broadly conflicting markets, says about the overall health of HubDub.
The less liquid market was created long ago, and traders have forgotten about it. If you come to HubDub to harvest probabilities, you should go to the freshest and most liquid prediction markets.
Overall, this swine flu epidemic/pandemic will allow us to assess how useful really the prediction markets are. There are not a crystal ball, as advertised during the 2003–2008 hype period, but they can be (provided they are liquid) more swift and more objective than the mass media, in certain circumstances. So it is a small utility, but interesting anyway.