Paul Krugmans excellent definition of the prediction markets

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Paul Krugman:

Betting markets don’t have any mystical power, but they do summarize conventional wisdom pretty well- [...]

E-mail confidentially to tell me the names of the economists who over-hype the prediction markets.

CrowdCast is an enterprise software platform that helps companies make better forecasts by tapping the knowledge stored in their employees.

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Interview

Download this post to watch the video —-if your feed reader does not show it to you.

Experts trading on prediction markets

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Chris Hibbert:

Top tier sports, national elections, and Hollywood releases are all arenas in which all the information one might analyze is already pretty much public. There are many methods for predicting these outcomes, and I wouldn’t argue that prediction markets have a huge advantage in these arenas. The markets where I expect PMs to have an advantage are where there are experts who, given an incentive, could share (or discover) information that’s not already public, and where you don’t already have an enormous crowd trying to figure out the answer. Certainly it’s fun to bet on your team or party, or to develop expertise on how the public will react to particular movies, but it’s not clear to me that we get better predictions in those areas.

This is also one of my criticisms of the Servan-Schreiber paper. While I believe there are probably markets in which the availability of serious money to be won could attract people who’d be willing to spend research in order to get a better answer, NFL sports isn’t an arena where spending thousands of dollars will help you uncover facts that aren’t already in the mainstream media.

When we talk about CEO markets, or product release dates, or market penetration numbers, we’re talking about [prediction] markets in which the information isn’t already out there, and some people will spend time and effort to ferret out relevant facts for reputation (we see this often on Foresight Exchange) or money.

If he had balls, Robin Hanson would debate Paul Hewitt, instead.

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Paul Hewitt: The Essential Prerequisite for Adopting Prediction Markets

It is a long text, so I will post again about it, in the near future. (Happy Xmas, by the way.)

ADDENDUM: Saturday, January 16, 2010: Debate between Robin Hanson and Mencius Moldbug