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Brought to you by CountryWatch, which has been providing “country intelligence, news, and forecasts for over 10 years — with customers both international and domestic customers in the academic, corporate, government and military markets.”

Best wishes to them.

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Global Election Market is powered by the Bet2Give software, which I like less than the NewsFutures software. NewsFutures abides by the prediction market approach (also adopted by InTrade .NET and HubDub). Bet2Give is less interesting in that respect.

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As for attracting new traders, pay attention to my next story about Predictify.

[CORRECTION: Jack Shafer found the Strumpf paper on his own. The ProQuest publicist sent him "a batch of clips on the topic culled by the company." Then, Jack Shafer googled for more.]

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Jack Shafer:

[...] Rhode and Strumpf attribute the demise of election betting to a number of causes. The law generally looked down on such wagers, and it grew tougher over time. Newspapers started giving less coverage to the wagers as they discovered “ethics.” The legalization of pari-mutuel betting on horse races in New York in 1939 provided a much better product for gamblers. And stock exchanges started barring members from gambling on elections.

The final nail, Rhode and Strumpf write, was the advent of the scientific poll, especially Gallup’s successful call of the 1936 election, which supplied newspapers with a “ready substitute for the betting odds, one not subject to the moral objections against gambling.”

As our culture’s moral objections against gambling approach zero [*], what excuse do daily newspapers have for ignoring the trove of political intelligence contained in its prices posted by Intrade, Iowa, and others? As indicators of future results, how much worse can they be than Zogby? They’d sure make better reading.

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[*] Bizarre comment. There are moral objections to gambling all over the Christian Right. [Jack Shafer is a hard-core libertarian, FYI.]

PDF file of Strumpf’s paper

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A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative represents the imputed perceived likelihood of this partially uncertain event (i.e., its aggregated expected probability). A 60% probability means that, in a series of events each with a 60% probability, the favored outcome is expected to occur 60 times out of 100, and the unfavored outcome is expected to occur 40 times out of 100.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism —with or without an automated market maker.

Prediction markets enable us to attain collective intelligence. Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that the traders bring when they agree on prices. The event derivative traders are informed by the primary indicators (i.e., the primary sources of information), like the polls, for instance. These informed speculators then execute their transactions based on their anticipations about the future —anticipations that will be either confirmed or infirmed.

The value of a set of prediction markets consists in the added accuracy that these prediction markets provide relative to the other forecasting mechanisms, times the value of accuracy in improved decisions, minus the cost of maintaining these prediction markets, relative to the cost of the other forecasting mechanisms. According to Robin Hanson, a highly accurate prediction market has little value if some other forecasting mechanism(s) can provide similar accuracy at a lower cost, or if very few substantial decisions are influenced by accurate forecasts on its topic.

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More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- Prediction Market Science

- The Midas Oracle Explainers On Prediction Markets

- All The Midas Oracle Explainers On Prediction Markets

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#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

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Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.

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2008 US Elections

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InTrade

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2008 US Electoral College

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- This is a dynamic electoral map, which is up to date. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version.

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- This is a dynamic electoral map, which is up to date. Feed readers: Download this webpage to visualize this InTrade widget.

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Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

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- All the charts below are also dynamic —they update themselves each time you open this webpage.

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2008 US Presidential Election Winner – Individual

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2008 US Presidential Election Winner – Political Party

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2008 US Congressional Elections Winner – Political Party

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2008 US Senate Control

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2008 US House Of Representatives Control

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Sources:
- The dynamic, compound prediction market charts are from InTrade .COM.
- The individual charts, however, are from InTrade .COM v2. We will later transition to the charts from InTrade .COM when the charting quality of their widgets improves.
- We are also waiting to be able to hot-link to the advanced charts of InTrade .COM.

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BetFair

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Winning Party

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Next US President

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Source: BetFair Politics Zone

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Iowa Electronic Markets

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2008 U.S. Presidential Election Vote Share Market

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2008 U.S. Presidential Election Winner-Take-All Market

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- Source: Iowa Electronic Markets

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NewsFutures

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Next US President Will Be Democratic.

© NewsFutures

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Next US President Will Be Republican.

© NewsFutures

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HubDub

- HubDub’s prediction markets on the 2008 electoral college

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Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Real Clear Politics – Polls

- Electoral-Vote.com – Polls

- Five Thirty Eight – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

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Canadian Elections

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InTrade

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Winner of Next Canadian Federal Election – Political Party

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Conservatives

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Liberal

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BetFair

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2008 Federal Election

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Most Seats

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Overall Majority

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UK Elections

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BetFair

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Next General Election – Most Seats

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Next UK Prime Minister

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InTrade

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Winner of Next UK Election – Political Party

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UK Conservatives

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UK Labour

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The Prediction Exchanges

- List of the main real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges at CFM

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Charts Of Expired Prediction Markets

- Charts Of Expired Prediction Markets

- Other Charts Of Expired Prediction Markets

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Chris Hibbert:

It looks like it from a cursory glance. In both cases, you can buy and sell, and the prices appear to be set by market interactions rather than institutional fiat. They both have a feedback mechanism based on “dividends” produced by on-field performance. ProTrade has a sophisticated formula that takes into account the players’ contribution to a winning season. SDX seems to base their dividends purely on wins and losses. The latter is easier to understand, and probably closer to the way most fans think about things. I think ProTrade is justified in believing they are closer to capturing the individual athlete’s contribution.

There’s also the difference in betting on players or teams. I think both might be helped by offering bets based on both players and teams. But until they cover hockey, I won’t spend a lot of time there. I don’t want to have to start following one of the major sports in order to bet in these play money markets.

ProTrade has a market maker, and SDX uses book orders.

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External Links:

- ProTrade

- Sports Derivative Exchange

- Zocalo (the open-source software for enterprise prediction markets, coded by Chris Hibbert)

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UPDATE: The SDX co-founder has a comment.

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PREVIOUSLY: BetFair impose new “Premium Charges”… Do BetFair gag the critics, too?

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A kind of HSX for sports.

In beta.

Best wishes to them.

UPDATE: The SDX co-founder has a comment.

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YooPick

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Previously: About Justin Wolfers’s column

Justin Wolfers’ Freakonomics post (which suggests that BetFair would have a better predictive power if US traders could use it).

Emile Servan-Schreiber’s hypothesis still holds.

Or else —your own hypothesis is welcome.

P.S.: The latest news is that InTrade now gives Barack Obama slightly above John McCain.

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Previously: Emile Servan-Schreiber on InTrade’s volatility