When Jack Welch gave a guest lecture at MIT’-s Sloan School of Management in 2005, someone in the crowd asked, “-What should we be learning in business school?”- Welch’-s reply: “-Just concentrate on networking. Everything else you need to know, you can learn on the job.”- Sloan’-s dean, Richard Schmalensee, was stunned because “-Jack was essentially saying a graduate business degree was a waste of time.”- […]
The interesting John De Palma writes to me:
In response to the comment you made beneath your Iraq War blog entry…-
Wolfers/Zitzewitz wrote: “-…- the public information on the probability of weapons of mass destruction in Iraq appears to have been of dubious quality, so it is perhaps unsurprising that both the markets were as susceptible as general public opinion to being misled.”-
(The paper is posted here –-PDF file. Figure 5 charts the historical pricing of the TradeSports WMD contracts.)Also, Wolfers/Zitzewitz/Snowberg wrote in a separate paper: “-Figure 5 shows the price of a contract on whether or not weapons of mass destruction (WMD) will be found in Iraq. Note that at some points the value of the contract exceeded 80%, yet weapons were never found. It is likely that this market performed poorly since the cost of gaining new information was quite high. Since WMD can be non-existent almost everywhere, but still exist somewhere, it was difficult to bet against the strong case made by the White House, at least initially.”- Paper: PDF file.
An article in the NY Times last year reminded me of the TradeSports WMD market. From the New York Times:
“-The Iraqi dictator was so secretive and kept information so compartmentalized that his top military leaders were stunned when he told them three months before the war that he had no weapons of mass destruction, and they were demoralized because they had counted on hidden stocks of poison gas or germ weapons for the nation’-s defense.”-
This assertion in the New York Times article suggests that even Iraqi “-top military leaders”- would have been on the wrong side of the TradeSports WMD trade.A few years ago when Prof. Wolfers spoke at Columbia Univ, he used the WMD market as an example of an inefficiently priced one, consistent with what he wrote in those papers. It seemed to me that the footprint of what he was saying could be in contracts of that nature being priced too high. (Though I would think it difficult to empirically support that point since even if contracts like that are priced too rich historically, it could reflect the necessary posted margin involved with going short.)
Thanks.
From the Wolfers/Zitzewitz paper: Prediction Markets – 2004 – PDF file
#1. Results of the first round: Republican Nicolas Sarkozy (31.2%), Socialist Segolene Royal (25.9%) —-updated
Then come Centrist Francois Bayrou (18.6%), Right-Wing Extremist Jean-Marie Le Pen (10.4%) and then the “-small”- candidates.
#2. The second round will be in two weeks: Republican Nicolas Sarkozy vs. Socialist Segolene Royal
All the polls have shown that the Republican Nicolas Sarkozy will beat her easily.
—-
PREDICTION MARKETS: The market-generated probability of the Socialist candidate has increased. Easy to understand why. There was an uncertainty about the Socialist candidate: “-Will she make it to the second round?”-. Now this uncertainty is over. Blogger Mike Smithson makes it like it is big news, but that’-s bullshit.
French Republican Nicolas Sarkozy: 77% at BetFair.
—-
The Economist (Apr 12th 2007):
No French presidential election in 50 years has looked as unpredictable as this year’s, the first round of which takes place on April 22nd. […]
Complete bullshit. Give us the market-generated probabilities, instead of the “-sentiment”- of the journalos.
Previous: WHY THE ECONOMIST SHOULD ADD MARKET-GENERATED PROBABILITIES NEXT TO ITS CONTENT. + NEXT SUNDAY, THE FRENCH WILL ELECT REPUBLICAN NICOLAS SARKOZY AS THEIR PRESIDENT.
—-
TAKEAWAY: French President Nicolas Sarkozy will reform the French economy —-France is a socialist country, right now.
UPDATE: Emile Servan-Schreiber of NewsFutures has published an update about the 2007 French presidential election on the French group blog “-AgoraVox”-.
BetFair Bet-o-Mobile: a vehicle with 19 TV screens, wireless Internet access and live satellite TV feeds
[Betting exchange (real-money prediction exchange, event derivative exchange)] Betfair has commissioned a mobile display unit that will tour UK sporting events. The vehicle, which uses 19 TV screens (including a 50in plasma) has wireless internet access and live Sky feeds. It was built for Betfair by Event Marketing Solutions (EMS) which delivered the vehicle in 12 weeks, ready for a first appearance at the Grand National. The unit is designed to not just let punters watch events, but to help introduce them to Betfair’-s betting exchange concept.
Here are pictures of the BetFair Bet-o-Mobile (with members of the BetFair team at Aintree). Pictures courtesy of the P.R. department at BetFair. (Thanks for sharing. 
)
And we end the series of pictures with la blonde de service.
SMOKIN’-…-!!!…- as yelled by “-The Mask”- (played by Jim Carrey), in that movie.
—-
More On BetFair:
– BetFair’s explainer on betting exchanges – at Midas Oracle &- BetFair – 2006-12-23
– Trading bets at BetFair – Betting exchange explainer – Backing vs. Laying – at Midas Oracle &- BetFair – 2007-01-23
– BetFair multiples – at Midas Oracle &- BetFair – 2007-01-20
– Prediction markets timeline – by Chris Masse (at Midas Oracle) –
– BetFair vs. TradeSports-InTrade – by Chris Masse (at Midas Oracle) – 2007-04-24
– X Groups &- X Universes – by Chris Masse (at Midas Oracle) – 2007-02-13
—-
There are three financial prediction exchanges (betting exchanges) in the tube, in North America. All of them are in stealth mode.
Previous blog posts by Deep Throat:
ProTrade’-s Jeff Ma:
[…] The book Moneyball was a great inspiration for starting PROTRADE. Mike Kerns (who is the real brains behind the PROTRADE idea) and I both read Moneyball and felt it changed our lives. Conceptually PROTRADE began as a way for players to trade athlete like they were stocks. The problem with that concept is it poses the question asked above: what’s the underlying value of the athlete? We launched with a very complicated “earnings” system that took into account how much a player helped his team win (the ultimate value of a player according to Moneyball) but had to abandon that due to its complicated nature for sports fans. Instead we shifted to an “earnings” system based on traditional statistics that everyone follows. So what our market is now is a predictive market based on one year “earnings” for athletes and teams. These “earnings” are based on traditional stats that fans follow already like home runs, or touchdowns or wins. As for the larger questions that people have posed above, I wonder if sports fans really know less about athletes than they do about publicly traded companies. If you compare the amount of information I know about Tiger Woods, Barry Bonds, Tom Brady to that of Larry Page, Meg Whitman or Bill Gates, I’d have to say I know a lot more about the former group but maybe that’s because I co-founded a [company] based in sports. Finally I challenge the notion that our sports financial instrument has less underlying value than say a weather derivative. Futures and commodities are often simply “bets” about whether an instrument is over or under valued by the market.
Previous: ProTrade = The Jock Exchange, the first public stock market that trades in professional athletes??.
Claude Allegre debunks the first part of Al Gore’-s documentary movie (the “-catastrophism”- part), and agrees with its second part (the “-let’-s use better technologies”- part).
“-Claude Allegre”- at Google Search