Unfortunately this is one kind of question where an Idea Futures market would not work too well, because people who correctly bet that the reactor will destroy the earth may not be able to collect their winnings. This would cause the market to under-estimate the risks.

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Ha! ha! ha!

The debate is raging at Overcoming Bias. One commenter has posted the abstract of a paper claiming the LHC is dangerous…

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ElectoralMarkets.com

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Via Read & Write Web

2008 Electoral Map (based on InTade) + 2008 Electoral Map (based on polls)

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UPDATE: Hal Finney

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See our PREDICTIONS page for more predictive data…

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Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade Ireland —(electoralmarkets.com).

By Lance Fortnow, David Pennock, and Yiling Chen.

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#1. Explainer On Prediction Markets

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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. 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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InTrade

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2008 US Electoral College

2008 Electoral Map Prediction = InTrade – Electoral College Prediction Markets = Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade Ireland = electoralmarkets.com

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- This is a dynamic chart, which is up to date. Click on the image, and open the website in another browser tab to get the bigger version.

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- This is a static chart, which is not up to date. Right-click on the image, and open the website in another browser tab to get the updated version.

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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 Senate Control

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2008 US House Of Representatives Control

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Source: Dynamic, compound prediction market charts from InTrade. The individual charts above, however, are from InTrade v2. I might later transition to the charts from either InTrade .COM or InTrade .NET.

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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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- 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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Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Electoral-Vote.com

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For more on probabilistic predictions, go to our “Predictions” page, or visit our webpage listing all the main prediction exchanges.

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Robin Hanson at LinkedIn

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Robin Hanson:

[...] I have a passion, a sacred quest, to understand everything, and to save the world. I am addicted to “viewquakes”, insights which dramatically change my world view. I loved science fiction as a child, studied physics and artificial intelligence for a long time each, and now study economics and political science — all fields full of such insights. Unfortunately, this also means I am tempted to leave a subject when I have mastered its major insights.

I also have a rather critical style. I beat hard on new ideas, seek out critics, and then pledge my allegiance only to those still left standing. In conversation, I prefer to identify a claim at issue, and then focus on analyzing it, rather than the usual quick tours past hundreds of issues. I have always asked questions, even when I was very young.

I have little patience with those whose thinking is sloppy, small, or devoid of abstraction. And I’m not a joiner; I rebel against groups with “our beliefs”, especially when members must keep criticisms private, so as not to give ammunition to “them”. I love to talk to people one on one, and common beliefs are not important for friendship — instead I value honesty and passion. My family disagrees with me quite often. I don’t take criticism personally – so please, don’t pull your punches.

My hobby for many years was imagining and promoting alternative institutions, and I started a mailing list on the topic. I have designed alternative institutions for health care, law enforcement, finding criticism, conversation, dividing chores, encouraging charity, keeping yourself rational, informing elections, etc. My best idea is Idea Futures, a radical alternative to existing academic institutions. But I felt that, without contacts or credentials, I wasn’t getting very far.

So I returned to school, at great expense, to get those contacts and credentials. Perhaps surprisingly, what I most missed at school was good wide-ranging intellectual conversation. That situation has greatly improved now that I’m at GMU, and I enjoy long conversations with Bryan Caplan and Tyler Cowen (Here’s a picture of the three of us). They lack a can-do engineering spirit and gee-whiz techie gossip, but you can’t have everything.

I am interested in all aspects of the future, including uploading, nanotech, hypertext publishing, cosmology and the foundations of physics, future economic growth rates, limits of computation, and the origin of life. I’d love to specialize in the economics of science fiction. Some fun places to discuss such issues are the Polymath and the Extropians mailing list which I have participated in since 1991. (I especially enjoy posts by Hal Finney.) I don’t sign onto “Extropianism” though; I don’t sign onto any “ism”. I am, however, a Alcor cryonics customer. For a few hundred dollars a year, I estimate I’m buying a >5% chance of living for thousands of (subjective) years. But many disagree (I’d like a web ref to a critic here).

I am a 6 foot, 200 pound, 48 year-old, well-educated, married white male American, with two children. I have a wife Peggy, and sons Tommy and Andy.

My favorite charity is TrickleUp. They give $100 loans to groups of five third-worlders to start a business. Another way I’d love to help the world’s poor is to open U.S. borders to all immigrants.

My core politics is “I don’t know”; most people seem far too confident in their political opinions. Beyond that, I like to explore the potential for decentralizing functions of government, I am intrigued by demarchy, and I have invented a new form of government called “futarchy.”

My favorite musicians are Vangelis – majestic, ethereal – and Enya – passionate, ethereal.

I’m also a fan of Fractal Image Compression, the CYC approach to AI, Strauss & Howe’s Generations theory and predictions, Many Worlds Quantum Mechanics, legalizing marijuana, and the Men’s movement.

My Jungian personality type is ENTP.

If you still want to know more about me, see my writings.

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My concern is that the small stakes limit of $2,000, the limits on who can operate markets, and the limitations on the scope of markets, will lead to spotty coverage which will preclude a robust evaluation of the merits of prediction markets in general. After all, we have intrade.com already which provides spotty coverage of a number of issues - how much more will this add?

Maybe “gambling can save science“, but I don’t see how these steps would show it.

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Proof that you can be “high IQ” and still lack judgment (in small ways).

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P.S.: Over that the micro slam above, I have the highest esteem and respect for Robin Hanson —a prediction market pioneer.

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Ellen Goodman:

[...] The closed-minded hedgehogs are those who know ”one big thing” and relate everything to that single, central vision. The open-minded foxes ”know many little things” and accept ambiguity and contradictions. [...] It’s no surprise that foxes are better at forecasting than hedgehogs. [...] How then do we cultivate good judgment? Most Americans are probably hybrid creatures. In a fox-like moment, Tetlock advises that we listen to our own ambivalence as ”we struggle to strike the right balance between preserving our existing worldview and rethinking core assumptions.” [...]

Hal Finney:

[...] One of the psychological measures or metrics which Tetlock found was well correlated with expert accuracy goes back to a distinction introduced by Isaiah Berlin in his book, The Hedgehog and the Fox. I haven’t read that book, but based on Tetlock’s presentation, Berlin distinguished between two cognitive styles to which he gave these colorful names. The hedgehog is said to know one thing and know it well. He sees events and trends in terms of his big idea, and aggressively extends it into new realms. Hedgehogs tend to be confident in the applicability of their fundamental concepts and impatient with those who “do not get it”. Foxes in contrast know many small things which they bring to bear in their analyses in a dynamical and flexible way. They tend to be uncertain and flexible, “on the other hand” types who are skeptical about their own predictive ability and in fact about the whole enterprise of making predictions in such an intractable realm. [...]

Daniel Drezner:

A hedgehog is a person who sees international affairs to be ultimately determined by a single bottom-line force: balance-of-power considerations, or the clash of civilizations, or globalization and the spread of free markets. A hedgehog is the kind of person who holds a great-man theory of history, according to which the Cold War does not end if there is no Ronald Reagan. Or he or she might adhere to the “actor-dispensability thesis,” according to which Soviet Communism was doomed no matter what. Whatever it is, the big idea, and that idea alone, dictates the probable outcome of events. For the hedgehog, therefore, predictions that fail are only “off on timing,” or are “almost right,” derailed by an unforeseeable accident. There are always little swerves in the short run, but the long run irons them out.

Foxes, on the other hand, don’t see a single determining explanation in history. They tend, Tetlock says, “to see the world as a shifting mixture of self-fulfilling and self-negating prophecies: self-fulfilling ones in which success breeds success, and failure, failure but only up to a point, and then self-negating prophecies kick in as people recognize that things have gone too far.”

I wanted to go back to this 2005 book from Philip Tetlock (Expert Political Judgment: How Good Is It? How Can We Know?) because I have been thinking of the big issue of last Tuesday (Should a betting exchange be a content provider, too?). My answer is: A betting exchange has no business being a content provider… except if the betting exchange can and will develop some very special content that the traditional media can’t or won’t provide, and that is of high strategic interest. You’ll spot that that’s the kind of twisted answers that the foxes would give. And I am wondering whether one could say that the hedgehog thinking (read it, the bad thinking) is in fact represented in the two other camps:

1. those who think that the betting exchanges have no business being content providers;
2. those who think that the betting exchanges should also be content providers.

The answer to this dilemma is, of course, … and if Mike Linksvayer is reading this blog post, he has already divined where I want to lead my readers with all this … the answer is, of course, innovation.

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Press “1″ if you think that’s a bias; press “2″ if you think that’s an error.

Previous: 2006 North Korea Missile prediction market: a scandal signed TradeSports-InTrade

HAL FINNEY: What do you think about the fact that Xanadu employees put their probability of success as high as 70%? This product is somewhat legendary today for its repeated failures despite its high promise. A number of articles have been written (see http://www.wired.com/wired/archive/3.06/xanadu.html from 1995 for example) analyzing the many obstacles and problems which arose over the years to prevent it from succeeding. With hindsight, 70% seems to be a vast overestimate of any rational estimation of its chances of success. Do you recall what the price trend was? Was the probability falling as time went on?

ROBIN HANSON: As usual, project insiders acted very confident of success, and those of us more on the periphery expressed more doubts. The market price moderated the confidence of the insiders, and had more outsiders been able to participate we would have moderated that confidence even more. The price did fall, but not that far, at least for a while.

HAL FINNEY: Seems like this is a case where anonymity would be important, otherwise employees might be seen as disloyal if they predicted the product would fail. How was that handled at Xanadu?

ROBIN HANSON: Hal, this market was not anonymous, which may indeed have been a mistake.

Disk Crash!

Due to a disk crash, the Finney family web pages are temporarily off line. The disk is being repaired and the data should be available again by early October 2004.

We apologize for the inconvenience!

Addendum (January 3, 2006): Hal Finney’s home page is live.

And, now, Hal Finney (whose name doesn’t appear on the Overcoming Bias blog post, due to a technical glitch that our good doctor Robin Hanson should correct real quick, in my view, and how come it’s not corrected already, he’s napping or what?):

One of Tetlock’s discoveries is that there is a significant correlation between expert prediction accuracy and a cognitive style measure introduced by Isaiah Berlin called “fox” vs “hedgehog”.
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The hedgehog is said to know one thing and know it well. He sees events and trends in terms of his big idea, and aggressively extends it into new realms. Hedgehogs tend to be confident in the applicability of their fundamental concepts and impatient with those who “do not get it”.

Foxes in contrast know many small things which they bring to bear in their analyses in a dynamical and flexible way. They tend to be uncertain and flexible, “on the other hand” types who are skeptical about their own predictive ability and in fact about the whole enterprise of making predictions in such an intractable realm.

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Technical Note: I have just found out that Overcoming Bias dot com is a fluid website. GREAT. (See my previous rant against non-fluid websites.)

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Technical Quizz: If the Hal Finney’s name does not appear on his blog post, on the website, then how come this little rascal of Chris Masse knows it’s him who authored the blog post? Google Reader displays the blog authors’s names. GOOGLE’S MORE INGENIOUS THAN ROBIN HANSON.

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Previous Blog Post:

- Overcoming Bias dot com = Robin Hanson’s group blog on truth discovery and decision rationality

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Addendum (November 23): Great post from Mike Linksvayer…