The journalistic rule should be that, if you cite one prediction exchange, you should cite the one that is the most liquid on the market you are writing about. For UK politics, it is clearly BetFair.
BetFair has clearly a PR problem.
Narrator: “Every year, more and more ice must be dumped into the ocean to cool the earth, thus solving the problem forever.”-
Little Girl: “-But . . .”-
- Read all the comments there.
UPDATE: Harvard Business Review
Justin Wolfers has escaped the Overcoming Bias purge, it seems. Justin Wolfers’-s 4 posts (published in 2007) remain archived on what is now Robin Hanson’-s QUOTE personal blog UNQUOTE. By contrast, Eliezer Yudkowsky’-s posts written for Overcoming Bias now redirect to locations at Less Wrong.
Justin Wolfers now blogs at Freakonomics (which is under the New York Times umbrella). By comparison to Overcoming His Bias, Freakonomics is a real group blog success. Years later after his creation, Freaknomics has a high degree of participation by his co-bloggers, and some brand-new guest bloggers were recently invited. Freakonomics is a sustainable group blog which develops one unique thematic —-economics. Sorry to burst our Master Of All Universes’-s bubble, but Freakonomics is the case-in-point that debunks the hypothesis that says that “-blogs are best defined not by topic but by lead author personalities”-.
As for Midas Oracle, who cares about Chris Masse’-s personality, as long as one gets his/her prediction market dope on a daily basis?
Chris, Eliezer was not “purged.” He requested to have his old posts moved to Less Wrong. No one else has made any similar request.
Eliezer was not “expelled”- he choose to move in order to build a community at Less Wrong using fancy comment karma software. The folks who wrote software for his new site also wrote the code at my new site.
Since the 2008 US presidential election, no more posts on prediction markets at Freakonomics.
Previously: Part I
A quick link panorama.
#1. Is InTrade being manipulated?
- Nate Silver shows that there are abrupt downward pressures on the Barack Obama event derivative, while we also see some abrupt upward pressures on the Hillary Clinton event derivative.
However, you can see by yourself that InTrade is resilient enough and does a great job of going back to normal [*], after just a few hours of trading:
- At Portfolio, blogger Zubin Jelveh blows the incidents out of proportion.
- Professor Lance Fortnow has a more careful analysis and notes that the price of the Barack Obama bounces back quickly enough.
- Quick thought: Maybe the media should use an average of event derivate prices for the last 5 work days…- so that the abrupt perturbations would be eliminated.
Professor Eric Zitzewitz:
I’m not sure you can conclude from Silver’s graphs that the market goes “back to normal.” You can conclude that it moves back in the opposite direction of the impact those large trades. Back when the Hillary for President market looked like it was being manipulated, it appeared that the manipulator was both placing a large purchase and then placing limit orders to provide price support and slow down the reversion of the price.
UPDATE: Are we witnessing manipulation attempts on the “-Florida to vote Republican”- prediction market at InTrade?
#2. Why does InTrade give a discounted probability for Barack Obama as US president?
- As you remember, Emile Servan-Schreiber of NewsFutures believes that it’-s a Republican conspiracy all over.
- Professor Justin Wolfers puts up an hypothesis: it’-s legally impossible for US traders to arbitrage on BetFair.
- InTrade put up a crappy excuse: the industry is still too “-young”-. How lame. How stupid. The industry was younger in the previous elections, where arbitrage opportunities didn’-t exist according to professors Justin Wolfers and Eric Zitzewitz (see their 2004 paper and their other publications).
- Blogger Zubin Jelveh swallows the InTrade P.R. line, and adds another crappy InTrade P.R. line: More arbitrage opportunities are being exposed in open air because much more observers are hunting down arbitrage opportunities in 2008 than in previous elections. That’-s a second blatant cretinery, uncorrected by the Portfolio blogger. Re-read Justin Wolfers’- blog post. Professor Justin Wolfers states that:
The current variation in price is larger than I have ever seen in my years of studying prediction markets. The forces of arbitrage that would typically eliminate these differences have been handicapped by the legal restrictions preventing U.S.-based traders from using overseas markets.
- Finally, professor Lance Fortnow says nothing about the arbitrage opportunities between InTrade and BetFair, but does offer some technical points about the issue of polls versus the prediction markets, centered around the question of state correlations. Read on.
UPDATE: Eric Crampton (a Canadian exiled in New Zealand) says he has managed to turn a buck by arbitraging between InTrade and iPredict New Zealand. He also makes 2 theoretical points. Go read it.
UPDATE: Greg Mankiw just linked to Nate Silver.
Here are the stats about the feed subscribers to these blogs who use either Google Reader or iGoogle.
To interpret these data, you should know that:
Freakonomics, the famous blog on economics, is powered by WordPress, which is known [*] to have grave security vulnerabilities. Yesterday, a dangerous hacker managed to get access to their blogging software, and published an opinion on the regulation of prediction markets, which represents the total opposite of what Steve Levitt believes in. No doubt the hacker (who signed as “-The Australopithecus“-) will get caught by the Police. No doubt Steve Levitt will get out of his torpor soon and re-establish the truth. We will then give airtime to Steve Levitt’-s arguments, on Midas Oracle. We’-re with you, doctor Levitt.
[*] I know that for a fact. Midas Oracle was hijacked yesterday by a dangerous hacker who signed as “-The Barbecue”-. I’-m not responsible for what he said.
Phil Gordon on Poker
Previous blog posts by Chris F. Masse:
The richer people and countries become, the happier they get.
Wow, that’-s what I call a discovery.
Freakonomics – #2 – #3
New York Times
Previous blog posts by Chris F. Masse:
March 26th, 2008 1:02 pm
“Predictify”? Did George W. Bush name it?
— Posted by WholeMealOfFood
@ Freakonomics, announcing their joint venture with Predictify (wrongly branded as a “-prediction market”-).