Prediction Markets + Market Predictions = Collective Forecasting That Pays Off

Category Archives: Exchange Liquidity

Does InTrade participate on its own prediction markets?

One (anonymous) InTrade trader:
I am utterly convinced Intrade participates in its own markets. Every few hours some kind of API hits the bids on the GOP 2012 nomination contract when the bids sum to more 100. It will even short bids at 0.1, which is a money losing proposition when you figure the transaction [...]

BRITISH CRETINERY: The Financial Times features the InTrade probabilities —not the BetFair ones.

This is really stupid. The decerebrated journalos at the FT chose to feature the illiquid, Ireland-based, un-regulated InTrade prediction markets instead of the very liquid, UK-based, regulated BetFair prediction markets on the next British congress.
Makes no sense at all.
The BetFair PR boys have an omelet on their face. They should work harder.
DISAMBIGUATION: The “illiquid” adjective [...]

The Robin Hanson manipulation papers make unrealistic assumptions, but it’s not like prediction markets are a bad idea…!!…

In terms of unrealistic assumptions in Robin Hanson’s series of papers on manipulation, the major ones have been out there since at least 2004.
Despite some limited evidence, the insistence on traders needing to know the direction of manipulation isn’t too compelling since the direction will be manifest insofar as the price is “wrong.” “Noise [...]

What is the liquidity on InTrade’s financial prediction markets?

My dear honorable Carlos Graterol,
I acknowledge you are a little InTrade fanboy, and that flies OK in my book. You say there are 3,000 daily transactions on the daily DJIA prediction markets. (It was much higher than that before the CFTC fined InTrade.) While I reckon that this liquidity is enough to generate trustworthy predictions, [...]

Prediction markets on US political elections: The Financial Times praises InTrade and snubs BetFair.

Financial Times:
Politics has won InTrade a lot of publicity [*], but its core markets are financial. [**] In Britain, politics tends to be the concern of companies that otherwise focus on sport. [***]
[*] The Financial Times never mentions that InTrade has been breaking US laws by providing its betting services to US residents —whereas BetFair [...]

Morons and Non-Morons — Sheep and Wolves

Required reading for “Wiser Than The Crowd”, who mis-understood one of my previous posts (kids, today):
Morons and non-morons, which I often call sheep and wolves, are not distributed independently across topics. The wolves are consistently attracted to the sheep, and the net effect of having more wolves and more sheep is to have more accurate [...]

There are not enough big active traders on InTrade.

Wiser Than The Crowd:
[...] Based on my Intrade blog, the Intrade forum, and emails and PMs I’ve received, I’d estimate the number of sharp traders with more than $10,000 to trade is in the single digits. Many of them have different specialties (entertainment, financials, politics, etc.) and don’t compete with one another.
Fundamentally, in order to [...]

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