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I am alerted today that the BetFair blog has updated its infamous Michigan story with a new compound chart bearing a clearer label. It reads now:

Republican nomination – The race so far

I’ll have some comments, below the chart, but first a technical note. The new chart posted is a 527-KB BMP image. I have replaced it with a 32-KB JPG image. The BetFair blog is not run professionally. Any web publisher knows that images should be reduced to the max. That’s the ABC of web publishing. (And to add insult to injury, I noted previously the technical bizarrery that the two professor Leighton Vaughan-Williams’s stories never appeared in the BetFair blog feed.)

For you information, I have updated all my previous blog posts on the topic with an addendum re-publishing this new chart.

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UPDATED ANALYSIS OF THE BETFAIR BLOG FIASCO:

1. Professor Leighton Vaughan-Williams should have defined what he means by “betting markets”, in his story. In the past (see the addendum of that story), prof Leighton Vaughan-Williams used two types of cocktail —one including all betting markets (traditional bookmaker odds and exchange odds), one including only the BetFair odds. He should publish an addendum to his story defining exactly what he means by “betting markets”, this time.
2. The BetFair blog editor should not have pasted a BetFair compound chart behind the writer’s back. It’s a big no-no in editing. Again, another proof (in a long list) that the Betfair blog is not run professionally.
3. If a chart were to be inserted on top of LVW’s story (with his consent, we hope), it should have been the expired chart(s) of the Michigan primary, since that’s the heart of LVW’s story.
4. The fact that the BetFair blog editor pasted (behind LVW’s back) a BetFair chart lead the readers (like Niall Or’Connor and me) to conclude that professor Leighton Vaughan-Williams means “the BetFair betting markets” when he writes about “the betting markets”. This is probably not the case, but nobody knows for sure —see my point #1 for the need of an explainer on this.
5. Now, if professor Leighton Vaughan-Williams means “the BetFair betting market” (I assign a low probability on this scenario), then the story looks bad. The story is bullish on the fact that the Mitt Romney event derivative (for the Michigan primary) was predictive. The election-day chart that I published yesterday evening (and republished below) shows Mitt Romney being the favorite starting at 3:00 PM EST on election day… Kind of a stretch to claim victory for the BetFair betting markets. I’m still waiting for BetFair to send me the full, historical chart on the Michigan primary.
6. BetFair should publish all expired charts —just like InTrade-TradeSports are doing. See my new page, re-publishing some important expired prediction market charts. That way, any controversy could be settled more quickly.
7. With all due respect to him, it looks bad on professor Leighton Vaughan-Williams for giving his writings to a corporate blog where the publisher and editor’s names are not listed anywhere, and whose overall content quality is feeble —to say the least. Especially since we read the testimony of a furious Betair blog writer, who described the BetFair blog editor as anonymous, incompetent and tyrannical.
8. Besides Niall O’Connor’s critical comments, professor Leighton Vaughan-Williams’s story on the BetFair blog has attracted a negative comment, calling his argument “questionable to say the least“, and asking (as I am doing on this current post) for more data to be published in an addendum.
9. It looks bad on the BetFair management for publishing completely crappy stories like that. It damages the BetFair brand. I should tell my readers, though, that the BetFair-TradeFair managers (like Michel Robb, Tony Clare, Mark Davies, David Jack, Robin Marks, etc.) are highly professional, efficient, law-abiding, forward-looking, helpful, ethical, polite, and respectful. It is a real pity that the BetFair blog tarnishes BetFair’s reputation.
10. Betair should focus on being a prediction market resource for journalists and bloggers. As of today, they still don’t provide on their website dynamic charts and expired charts.
11. As I repeated many times on Midas Oracle, prediction market journalism is hard, complex and costly. It can’t be done by any living organism (hermaphrodite or not ) simply equipped with a computer and an Internet connection.

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As an addendum, I re-publish here the election-day Michigan chart (on the Republican side). As I said, I’m still waiting for BetFair to send me the full, historical chart. You can see, on this Republican-side chart, Mitt Romney (in red) as the Comeback Kid —starting at 3:00PM EST on election day (that’s 8:00 PM, British time, on the chart).

For your information, here’s what professor Leighton Vaughan-Williams wrote. As I said, an explainer from him is needed to determine whether he means the “betting markets” in general (with, or without, BetFair included?) or the “BetFair betting markets”.

Professor Leighton Vaughan-Williams on the official BetFair blog:

[...] Those taking the same advice on Tuesday evening [2008-01-15 = date of the Michigan primary] were similarly well rewarded as well-backed Mitt Romney stormed into clear favouritism in the markets and a comfortable victory at the polls. After a blip in the New Hampshire Democratic primary the old certainties – that election favourites tend to win elections – was re-established.

As in the Republican New Hampshire primary, the polls and pundits had declared the race between Senator McCain and Governor Romney as a toss-up while the betting markets pointed to a comfortable victory in both cases for the eventual winners. Once again, in the battle of the polls, pundits and markets, the power of the betting markets to assimilate the collective knowledge and wisdom of the crowd had prevailed. [...]

As for the InTrade “betting markets”, if that’s what professor Leighton Vaughan-Williams means (solely, or among others), they show a strong support for Mitt Romney in the last 2 days (which includes election day). Kind of a stretch to claim a victory for the “betting markets”. Also, it would be funny to have the (anynomized) InTrade data interpreted on the blog of another exchange (BetFair, a competitor of InTrade-TradeSports) to hint about the alleged strength and accuracy of the BetFair “betting markets”. That would be the last drop that breaks the water bucket. Another reason why professor Leighton Vaughan-Williams should come forward to explain what he means by “betting markets” in his story. Does he mean the “InTrade betting markets”???

(FYI, the Mitt Romney event derivative was expired to 100.)

Psstt… Sounds like a vertical line is lacking on this chart… Look at the right end… Bizarre.

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NEXT: No more anonymized trading data, please. State your source(s).

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1. The CO-AUTHORS plugin, which does what it says. One specific post or page can be assigned two or more co-author(s) by the blog editor. Very interesting. (I don’t get why the plugin developer forbids the co-authors to “edit” the post/page, though. Mystery, which I will try to clear up with the software architect of this plugin.)
2. The ROLE MANAGER plugin (not listed in the official WordPress plugin directory), which changes the standard WordPress matrix of roles and capabilities. It can redefine the capabilities of one category of users (i.e., one “role”), and can change the capabilities of one individual, but won’t assign common capabilities on a post/page-by-post/page basis (unlike the CO-AUTHORS plugin). To put it in another way, the ROLE MANAGER plugin can be used to extend (or restrict) the capabilities of the blog authors. Right now, they can only publish a post, not a page. In this instance, they would be allowed to write and edit pages —without the need for the blog administrator to promote these authors as full editors (which would be tricky since those multiple editors could then edit their peers’ posts –not acceptable in a big group blog with 71 blog posters).

Very interesting.

On Midas Oracle, one could have:

• Authors Mike Giberson and Adam Siegel writing together a post on “How Great An Exchange Inkling Markets Is“.
• Authors Chris Masse, Mike Giberson, David Pennock and Jason Ruspini writing together a page on “The Ultimate Prediction Market Definition“.
• Etc., etc., etc.
• If plenty of co-authors collaborate on a post/page, then my hope is that Midas Oracle could become more than just a “blog”, and be also a vertical encyclopedia on prediction markets. (Of course, participation inequality remains an issue.)

[External Reading: For the life of you, don't miss this blog post by Tim O'Reilly on Wikipedia.]

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UPDATE: The creator of the CO-AUTHORS plugin writes back to me:

Not allowing all of the co-authors the ability to edit a page is not by design; I just have to do more research on WordPress permissions to find out how to do so, if even it is possible.

I wonder whether using the two plugins together is the solution…

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UPDATE: My current thought is to give each Midas Oracle author the capability to create, write up and edit his/her own page(s). And then to assign co-authors to some post(s) and page(s), on a case-by-case basis.

As I wrote on this CFM webpage, I use open-source software for most of my needs. And the text I’m typing for this story is treated by the open-source blogging software, Word Press.

It makes sense to use these open-source software packages (blog editor, text editor, browser, e-mail reader, office application, utilities, etc.) because the software architects and programmers who build them do so with a self-interested goal in mind: they are the primary users of the tools they build. I trust that they are truly willing to deliver a top-notch product.

Software architects and programmers are not the final users of any prediction market software package. I can’t see why they would spend countless hours each week to craft a free tool they will never use.

Am I right or wrong, folks?

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Addendum (December 09): CTO Mike Linksvayer has posted a comment…

There is no definitive answer but your hypothesis is completely bogus.

Any type of software has end users, some of them also programmers, some of them who want to improve the software they use.

In what sense are the creators of say Firefox its primary users? A tiny fraction of Firefox users are open source developers, let alone Firefox developers.

The open source prediction market software I know of has been created by users of prediction markets.

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My Response To Mike Linksvayer: The creators of FireFox are the first users of this browser. Ditto for all the tools I listed. Now look at open-source software packages for prediction markets: How many software architects would run internal prediction markets for their own use? Zero. How many of them are contributing to the Zocalo and Idea Futures projects? Epsilon.

My hypothesis could be wrong, but the numbers support it.

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Addendum (December 09): Here’s an excerpt of Crosbie Fitch‘s comment…

The question is: Is there enough interest to bring disparate developers together to collaborate on development of prediction market software?

If there was, then using the GPL would be sensible.

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Appendix: Full list of software for prediction markets at CFM.

Yet another PM post over there, at Overcoming Errors dot com (where the main error is to focus on bias and not on errors). In passing, note that the Robin Hanson’s blog posts are often published at 06:00 AM —a time where most honest people are still in their bed. The guy is probably making use of an automatic TypePad function (so as to pretend that he is already up and shaved at that early hour –even on a Sunday). I should inquire whether Word Press (the open-source blogging software used for Midas Oracle) has the same kind of function —keeping up with the Jones, you know.

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Does Profit Rate Insight Best? – [trader's profits vs. trader's predictive power] – by Robin Hanson – 2006-12-03

Upcoming in Theory and Decision (in the same issue as I), David Johnstone asks a fundamental prediction market question: should we believe traders who make the most money, relative to traders with good statistical forecasting scores? His answer is “No”:

A gambler who wants to maximize future profits should trade on the advice of the analyst cum probability forecaster who records the best probability score, rather than the highest trading profits.

The reason is simple: when a forecaster’s prediction falls within a bid-ask trading spread, he cannot improve his trading profit, but he can still improve his probability score. The extreme case is even simpler: if no market exists, he can make no trades, but he can still improve his score.

Another reason to prefer a statistical score is that the trader’s goal might be something other than maximizing the logarithm of their final trading profit. Only for log utility traders with no bid-ask spread could profit reveal as much as a log scoring rule.

On the other hand, if there is not just one statistical score to use, then a forecaster might have selected the score to show you that made them look best, reducing its info value. This is much harder to do with trading profits.

Finally, let me note that my automated market maker, which I call a “market scoring rule,” has a zero bid ask spread. So profit trading with it will rate someone just as well as a statistical score, at least if a combinatorial version is used that allows for all the combinations that a scoring system might allow.

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Technical Note: Go to his blog post. Put the cursor of your mouse on each of his three links. Each time, let the cursor idle on the link for at least one good second or two. What do you see? NOTHING HAPPENS. Now put your same cursor on any link that you see above, in the text that I have treated. What do you see? You see a tiny pop-up message, which is called a “link title”. This link title is very important for the reader: it tells him/her more information about the webpage he/she will land on if he/she clicks on that link. (A second inkling comes from the status bar, at the bottom of the browser window, which spells out the URL of that link.)

Either Robin Hanson types his text in a HTML editor that doesn’t do link title (and he later pastes the code source in TypePad), or his proprietary blog editor, TypePad, does not support link title. Or it could be that TypePad does support link title, but our lazy doctor doesn’t bother filling the “link title” box. In all cases, it’s bad practice.

Required Reading For Our Good Doctor Robin Hanson:

- Using Link Titles to Help Users Predict Where They Are Going – by Jakob Nielsen – 1998-01-11

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Technical Note #2: Here’s more advice from Jakob Nielsen —PUT IN BOLD YOUR MOST IMPORTANT SENTENCE(S). Funny enough, it’s an important principle which our good doctor Robin Hanson is totally refractory to —for a totally irrational and mysterious reason. (Remember: that’s a guy who has set up a group blog on rationality, and how to overcome bias. If he asked me, I’d have some suggestion on where to start. What about: how to overcome the anti-Internet usability bias?)

- Microcontent: How to Write Headlines, Page Titles, and Subject Lines – by Jakob Nielsen – 1998-09-06

- How Users Read on the Web – (They don’t.) – by Jakob Nielsen – 1997-10-01

- Writing for the Web – by Jakob Nielsen – often updated