I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.
If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.
I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.
Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.
The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.
Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.
Previously: Chicago wona€™t have the Olympics in 2016.
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
Who will recieve the winning bid to host the 2016 Olympics?