Prediction Markets + Market Predictions = Collective Forecasting That Pays Off

Category Archives: Explainers

Idea Pageants are no Prediction Markets.

Written by Chris F. Masse on November 25, 2009 — Leave a Comment

An explanatory post by Paul Hewitt.
Paul, don’t talk about “shares”. The right vocabulary is “event derivatives” — or, in other contexts, “event derivative markets” and “prediction markets”.

Also posted in Analysis (Meta), Collective Forecasting, Collective Intelligence - Wisdom Of Crowds, Exchanges & Markets | Tagged , , ,

Prediction markets VERSUS Prediction markets on prediction markets VERSUS Conditional prediction markets

Written by Chris F. Masse on September 2, 2009 — 2 Comments

Panos Ipeirotis:
[...] If I interpret correctly what you suggest, this will be equivalent to a “prediction market on a prediction market”, aka “options on markets”: Guess where the price of a long term market will be at set points in the future, before the expiration of the long-term market. InTrade experimented with such contracts last [...]

Also posted in All Best Posts Ever, Analysis (Market Calls), Analysis (Meta), Collective Forecasting, Exchange & Market Designs, Exchanges & Markets | Tagged , ,

Financial gaming explained in 50 seconds

Written by Chris F. Masse on August 19, 2009 — Leave a Comment

TradeSmarter
Download this post to see the embedded video —in case your feed reader doesn’t show it to you.

Also posted in Exchanges & Markets, Finance, Software | Tagged , , , , , , , , ,

How BetFair Works = How BetFair lies about the history of the betting exchange industry

Written by Chris F. Masse on August 12, 2009 — Leave a Comment

How BetFair Works — VIDEO

This BetFair video totally misinforms the public about the history of the betting exchange industry. It actually started in the United States of America, with the Iowa Electronic Markets in 1988, the ForeSight Exchange in 1994, and the Hollywood Stock Exchange in 1996.

Also posted in All Best Posts Ever, Analysis (Industry), Betting, Exchanges & Markets, History, Internet Marketing - Internet Commerce | Tagged , , , , , , , , , ,

Don’t shoot the speculators. They predict prices, not set them.

Written by Chris F. Masse on July 13, 2009 — 1 Comment

L. Gordon Crovitz in the Wall Street Journal:
More-detailed reporting on who has which kinds of positions in oil would make the market more understandable. It would show that so-called financial speculators are trying to predict price movements, but also trying to hedge risk. Likewise, commercial traders that take delivery of oil are hedging risks, while [...]

Also posted in All Best Posts Ever, Analysis (Meta), Collective Forecasting, Economics, Exchanges & Markets, Finance, Hedging & Insurance, Regulations | Tagged , , , , , , , , , , ,

Can prediction markets help improve economic forecasts?

Written by Michael Giberson on June 15, 2009 — 10 Comments

Contrary to the suggestion of Hendry and Reade, I don’t think “model averaging” is a useful explanation of what prediction markets do.

Also posted in All Best Posts Ever, All Guest Authors's Posts, Analysis (Meta), Collective Forecasting, Economics, Exchanges & Markets, Mechanism Designs | Tagged , , , , , , , , ,

At the contrary, let’s call them prediction markets.

Written by Chris F. Masse on June 15, 2009 — Leave a Comment

Panos Ipeirotis:
[...] Now, do we need to call them *prediction* markets? I would agree that there is no real reason for that… All markets have information aggregation characteristics and sometimes it is annoying to see how much we reinvent the wheel when studying “prediction” markets, pretending that they are fundamentally new beasts. (The “we” includes [...]

Also posted in Analysis (Industry), Analysis (Meta), Collective Forecasting, Exchanges & Markets | Tagged , ,

Prediction Markets = Betting Markets = Event Derivative Markets

Written by Chris F. Masse on June 12, 2009 — 2 Comments

Prediction Markets = Betting Markets = Event Derivative Markets
They don’t agree, but I don’t care. I am right, and they are wrong.

Also posted in Exchanges & Markets | Tagged , ,

The Accuracy Of Prediction Markets

Written by Chris F. Masse on June 12, 2009 — 24 Comments

- A Lesson in Prediction Markets from the Game of Craps – by Paul Hewitt
- Why Public Prediction Markets Fail – by Paul Hewitt
Both articles are required reading for Jed Christiansen and Panos Ipeirotis (alias “Prof Panos”).

Also posted in All Best Posts Ever, Analysis (Accuracy & Precision), Analysis (Market Efficiency), Analysis (Meta), Collective Forecasting, Exchanges & Markets | Tagged , , , , , , ,

Patrick Young (InTrade’s fifth Beatle) still can’t figure out the industry he helped created.

Written by Chris F. Masse on June 6, 2009 — Leave a Comment

Well, we’re here to help out the lost souls.
Patrick Young:

Director and Founder: Intrade
Privately Held; 11-50 employees; Capital Markets industry
September 1999 – February 2002 (2 years 6 months)
I was one of the founders and a director of the company Intrade which set up one of the first sports exchanges in Europe.
Nowadays there is a [...]

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