Check that CFM page for updates. And contact me so I can make additions to the list. (I’ll then re-publish that updated list on Midas Oracle.)

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• Michael Abramowicz – Michael B. Abramowicz – (Law School, George Washington University, Washington, D.C., U.S.A.) — Post Archives at Midas Oracle
• Bernd H. Ankenbrand – Bernd Ankenbrand – (Lecturer, Witten/Herdecke University, Germany, E.U.) — Post Archives at Midas Oracle
• James Annan – (Global Environment Modelling Research Program, Frontier Research Center for Global Change, Japan)
• Werner Antweiler – (UBC Election Stock Market, Sauder School of Business, University of British Columbia, Vancouver, Canada)
• Kenneth J. Arrow – Kenneth Arrow – (Economics Department, Stanford University, California, U.S.A.)
• Tom W. Bell – Tom Bell – (Law School, Chapman University, California, U.S.A.) — Post Archives at Midas Oracle
• Joyce E. Berg – Joyce Berg – Profile – (Iowa Electronic Markets, Accounting, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• Richard Borghesi – (Finance, Texas State University at San Marcos, Texas, U.S.A.) — Post Archives at Midas Oracle
• Kay-Yut Chen – (Information Services & Process Innovation Lab, HP Labs, HP, California, U.S.A.)
• Yiling Chen – (Micro-Economic and Social Systems, Yahoo! Research Labs, New York, U.S.A.) — Post Archives at Midas Oracle
• Eric Crampton – (Department of Economics, University of Canterbury, New Zealand) — Post Archives at Midas Oracle
• Ely Dahan – (Marketing, Anderson School, University of California at Los Angeles, Los Angeles, California, U.S.A.)
• Anita Elberse – (Marketing, Harvard Business School, Harvard University, Massachusetts, U.S.A.)
• Leslie R. Fine – Leslie Fine – (Information Dynamics Lab, HP Labs, California, U.S.A.)
• Gary William Flake – Gary W. Flake – Gary Flake – (MicroSoft, U.S.A.)
• Robert Forsythe – (Dean, College of Business Administration, University of South Florida, Florida, U.S.A.) — Previously: (Economics, Iowa Electronic Markets, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• Lance Fortnow – Lance J. Fortnow – (Department of Electrical Engineering and Computer Science, McCormick School of Engineering, Northwestern University, Illinois, U.S.A.)
• Keith Jacks Gamble – Keith Gamble – (Economics (University of California at Berkeley) – California, U.S.A. — Post Archives at Midas Oracle
• Michael Gorham – (IIT Center for Financial Markets, Stuart School of Business, Illinois Institute of Technology, Illinois, U.S.A.) — Previously: (CFTC)
• Thomas S. Gruca – Thomas Gruca – Profile – (Iowa Electronic Markets, Marketing, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• Refet Gurkaynak – (Department of Economics, Bilkent University, Turkey)
• Friedrich August Von Hayek — R.I.P. — The market as an information aggregation tool: The Use of Knowledge in Society —
• Robert W. Hahn – Robert Hahn – (Executive Director, Reg-Markets Center, American Enterprise Institute, Washington, D.C., U.S.A.) — Post Archives at Midas Oracle
• James D. Hamilton – James Hamilton – (Department of Economics, University of California at San Diego – California, U.S.A.) — Post Archives at Midas Oracle
• Robin Hanson – Robin D. Hanson – (Economics, James M. Buchanan Center, George Mason University, Virginia, U.S.A.) — Post Archives at Midas Oracle
• M. Todd Henderson – (Law School, University of Chicago, Chicago, Illinois, U.S.A.)
• Chris Hibbert – (Software Architect, Zocalo Project Manager, California, U.S.A.) — Post Archives at Midas Oracle
• Charles Holt – Charles A. Holt – (Department of Economics, University of Virginia, Virginia, U.S.A.)
• Bernardo A. Huberman – Bernardo Huberman – (Social Computing Lab, HP Labs, California, U.S.A.)
• Frédéric Koessler – (Economics, Centre Nationale de la Recherche Scientifique, France, E.U.)
• Anthony M. Kwasnica – Anthony Kwasnica – (Business Economics, Department of Insurance and Real Estate, Smeal College of Business Administration, Penn State University, Pennsylvania, U.S.A.)
• Nicolas Lambert – (Department of Computer Science, Stanford University, California, U.S.A.)
• John O. Ledyard – John Ledyard – (Economics and and Social Sciences, Division of Humanity and Social Sciences, California Institute of Technology, California, U.S.A.)
• Andrew Leigh – (Economics, Research School of Social Sciences, Australian National University, Australia)
• Steven Levitt – Steve Levitt – Steven D. Levitt – (Economics, Director of the Becker Center on Chicago Price Theory, Graduate School of Business, University of Chicago, Illinois, U.S.A.)
• Saul Levmore – (Law School, University of Chicago, Illinois, U.S.A.)
• Robert E. Litan – Robert Litan – (Vice President for Research and Policy, Kauffman Foundation, Kansas City, Missouri, U.S.A.)
• Thomas W. Malone – Thomas Malone – Tom Malone – (MIT Center for Collective Intelligence, Management, MIT Sloan School of Management, Massachusetts Institute of Technology, Massachusetts, U.S.A.)
• Charles F. Manski – Charles Manski – (College of Arts and Sciences, Norwestern University, Illinois, U.S.A.)
• Adam Meirowitz – (Department of Politics, Princeton University, New Jersey, U.S.A.)
• Paul Milgrom – (Department of Economics, Stanford University, California, U.S.A.)
• Tracy Mullen – (Information Sciences and Technology, Penn State University, Pennsylvania, U.S.A.)
• Forrest Nelson – Profile – (Iowa Electronic Markets, Economics, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• George R. Neumann – George Neumann – Profile – (Iowa Electronic Markets, Economics, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• Ryan Oprea – Profile – (Director of the LEEPS laboratory, Economics, University of California at Santa Cruz, California, U.S.A.)
• Gerhard Ortner – (University of Applied Sciences, Austria, E.U.)
• Marco Ottaviani – (Management and Strategy, Kellogg School of Management, Northwestern University, Illinois, U.S.A.) – Formerly: (Economics Department, London Business School, United Kingdom, E.U.) — Post Archives at Midas Oracle
• David Paton – (Industrial Economics, Business School, Nottingham University, United Kingdom, E.U.)
• David M. Pennock – David Pennock – (Principal Research Scientist, Micro-Economic and Social Systems, Yahoo! Research Labs, New York, U.S.A.) — Post Archives at Midas Oracle
• Charles R. Plott – Charles Plott – (Economics and and Social Sciences, Division of Humanity and Social Sciences, California Institute of Technology, California, U.S.A.)
• David Porter – (Economics and Finance, Chapman University, California, U.S.A.)
• Todd Proebsting – Todd A. Proebsting – (Microsoft & University of Arizona, U.S.A.)
• Russ Ray – (Finance, College of Business, University of Louisville, Kentucky, U.S.A.)
• Daniel Reeves – (Micro-Economic and Social Systems, Yahoo! Research Labs, New York, U.S.A.) — Post Archives at Midas Oracle
• Paul W. Rhode – Paul Rhode – (US Economic History, College of Management, The University of Arizona, Arizona, U.S.A.) – Formerly: (University of North Carolina, North Carolina, U.S.A.)
• Thomas A. Rietz – Thomas Rietz – Profile – (Iowa Electronic Markets, Finance, Henry B. Tippie College of Business, University of Iowa, Iowa, U.S.A.)
• Richard Roll – (University of California at Los Angeles, Los Angeles, California, U.S.A.)
• Thomas W. Ross – Thomas Ross – (UBC Election Stock Market, Sauder School of Business, University of British Columbia, Vancouver, Canada)
• Rahul Sami – (School of Information, University of Michigan, Michigan, U.S.A.)
• Sam L. Savage – Sam Savage – (Consulting Professor, Stanford U., California, U.S.A.) — Post Archives at Midas Oracle
• Thomas C. Schelling – Thomas Schelling – (Economics, School of Public Affair, University of Maryland, Maryland, U.S.A.)
• Emile Servan-Schreiber – (NewsFutures, New York City, New York, U.S.A. & Paris, France, E.U.) — Post Archives at Midas Oracle
• Robert J. Shiller – Robert Shiller – Profile – (Economics, Yale University, Connecticut, U.S.A.)
• Bernd Skiera – (Electronic Commerce, Goethe University, Germany, E.U.)
• Vernon L. Smith – Vernon Smith – (Economics, Economic Science Institute, Chapman University, California, U.S.A.)
• Erik Snowberg – (Stanford University, California, U.S.A.) — Soon at CalTech
• Peter Norman Sorensen – (Finance, Department of Economics, University of Copenhagen, Denmark, E.U.)
• Martin Spann – (Marketing and Innovation, University of Passau, Germany, E.U.)
• Koleman Strumpf – Koleman S. Strumpf – (Economics, School of Business, University of Kansas, Kansas, U.S.A.) – Formerly: University of North Carolina, North Carolina, U.S.A.) — Post Archives at Midas Oracle
• Cass Sunstein – Cass R. Sunstein – (Law School, University of Chicago, Chicago, Illinois, U.S.A.)
• James Surowiecki – (The Wisdom Of Crowds) – (New York, U.S.A.)
• Paul C. Tetlock – Paul Tetlock – (Finance, Business School, University of Texas at Austin, Texas, U.S.A.) — Post Archives at Midas Oracle
• Philip Tetlock – Philip E. Tetlock – (Leadership, University of California at Berkeley, California, U.S.A.)
• Hal R. Varian – Hal Varian – (Chief Economist, Google, California, U.S.A.) — Formerly: (Haas School of Business, Department of Economics, University of California at Berkeley, California, U.S.A.)
• Dorina Tila – (Economics, George Mason University, Virginia, U.S.A.)
• Leighton Vaughan-Williams – (Economics and Finance, Business School, Nottingham Trent University, United Kingdom, E.U.)
• Michael Wellman – Michael P. Wellman – (Computer Science and Engineering, University of Michigan, Michigan, U.S.A.)
• Justin Wolfers – Justin J. Wolfers – (Business and Public Policy, Wharton Business School, University of Pennsylvania, Pennsylvania, U.S.A.) — Post Archives at Midas Oracle
• Eric Zitzewitz – Eric W. Zitzewitz – (Economics, Dartmouth College, Massachusetts, USA) – Formerly: (Stanford University, California, U.S.A.) — Post Archives at Midas Oracle

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My short thoughts on the CFTC announcement:

1. Nothing new..
2. No good. Sports prediction markets won’t be allowed by the CFTC (no matter), and, thus, the US-based event derivative exchanges will never be profitable. (Remember that HedgeStreet V1 went into bankruptcy, even though they were well funded.)
3. Going forward, we are going to see an opposition between people (like me) who favor prediction markets on all topics (including sports), and people who want the term “prediction markets” to define the socially valuable event derivative markets, only.
4. Speaking of differences of opinion, I was agreeably surprised by the liberalism of Joyce Berg of the Iowa Electronic Markets. “She said some guidance is definitely needed to make a distinction between these markets and gambling, but doesn’t want to see such markets regulated out of existence.” Great. Deep respect for Joyce Berg, after that.
5. Interesting people to listen to, with attention, in the coming weeks: Tom W Bell (who opposed CFTC regulation from the start), on one hand, and, on the other hand, Koleman Strumpf and Steve Levitt (who are both libertarian when it comes to gambling and betting). Event derivative trader Caveat Bettor will also be someone whom we expect comments from. [UPDATE: I forgot to add BetFair's Mark Davies in the list, and some others.]
6. Developing…

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UPDATE: See David Pennock’s comment, just below…

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She says prediction markets are “substitute” for polls… or any forecasting tool.

[...] More than 2 million shares have already been traded in presidential primary contracts on Intrade this year. John Delaney, the company’s CEO, is convinced 2008 will be the market’s biggest year yet. “Our ’08 volumes are already approaching the total for ’04 volumes —and we are still 20 months away,” he said earlier this year. “Our own internal prediction market states that 2008 is going to be amazing, with trading volumes on the Intrade presidential futures markets set to exceed by several hundred percent our 2004 volumes.” And 2004, he was quick to add, was itself a record year for the company, which has grown exponentially since it started in 2001.

Part of the reason for that growth is that markets have proved more reliable than polls, said Justin Wolfers, an economics professor who teaches a business school class on prediction markets at the University of Pennsylvania. The University of Iowa’s electronic market has correctly called every presidential race since its inception in 1988 and come within one point of guessing the total percentage of votes received by the winner. Wolfers predicted that cable news shows would turn to prediction-market experts for analysis in 2008. “My forecast is that they’ll either have someone in the studio whose job it is to track the markets, or the James Carvilles of the world will learn how to interpret the markets, and they’ll integrate that into their commentaries,” he said. [...]

Let’s wait November 2008 and see whether Justin Wolfers’ bold prediction becomes accurate —I refer here to the first part of his dual prediction. I am short —if we’re talking of the three networks (CBS, NBC and ABC).

UPDATE: I overlooked the “cable news shows” phrase. Sorry for that. I had the three networks in mind (ABC, CBS, NBC). Also, I thought  Justin Wolfers was talking about Election Day, specifically. (My initial thought: “no way”. Because of the leaking of raw polls that send false information to the traders.) He was talking about the whole “2008″ year. I read that article too quickly, last time. I messed it.

MY SECOND THOUGHT: Yes, what he says seems reasonable and in line with what’s happening right now in the US business-oriented media.

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In another news article, Iowa Electronic Markets’s Joyce Berg says:

We’ve looked at 600 polls in the past. In 74 percent of those, the market has been [more accurate] than the polls.

[...] Campaigns occasionally call to ask if it’s ok if they trade (it is), and “in prior elections we’ve had IP addresses from the White House that have been watching the prices and other what you would think of as government agencies looking at prices. So it seems to us that people are interested in these prices.” [...]

Hummmm… “People” are more interested in the political polls than in the dynamic probabilistic predictions of the political betting exchanges like IEM. Only a small portion of the “people” do care about political prediction markets, for the reason that the advantage is marginal, in that case —the political polls are the dominant advanced indicators used by anyone including the event derivative traders. As I said many times here, we should find and develop event derivative markets that aggregate information (we all know they do ) and that do that much, much better than the competitive institutions. To obtain a smashing comparison, the only way is to select a situation where the traditional advanced indicator (or primary source of information) is systematically biased for some structural reason(s). In those cases (and political election forecasting is not among those), the prediction markets can make a macro difference.

External link: Iowa Electronic Markets – (IEM)

I have been reading midasoracle for a few weeks now. It is a really useful survey of what is going on in the prediction market world. I think what I like best is the relatively even tone that you have– no one gets a free-ride, and a spade is called a spade.

I have noticed, however, that one prominent prediction market is not deeply scrutinized– the [Iowa Electronic Markets (IEM)]. [*] As I understood it, their main comparative [advantage] was a legal monopoly on running real money markets in the US. As we know, a lack of competition can allow poor practices to persist. Just a couple of examples:

- They are slow to add relevant contracts. For example, in the Republican presidential nominination market there is contract on F Thompson, who is currently the second highest priced at InTrade. Similarly, no Gore contract in the Dem market;

- The markets can get far out of whack from the bigger and presumably more reliable markets like InTrade. For example, Obama is currently 5 points higher at Iowa than Intrade and this gaps exceeded 10 points a few weeks ago;

- The smaller markets have oscillating prices which seem pretty much worthless as a forecasting device. For example, the flu market which got some good ink last year has prices which jump up and down 25-50 cents a day. (see price histories.)

- Finally, I remember reading once about how the 2000 presidential market was a real [embarrassment]. Something like the participants did not realize that the winner take all market was based on vote totals not electoral college, so the market incorrectly picked Bush for the entire day after the election! I have never heard the folks at [Iowa Electronic Markets (IEM)] comment on this. Maybe you could ask the organizers about this case, and see if they would provide more detailed data (within day prices) which helps explain what was going on.

I have always said that the Iowa Electronic Markets (IEM) scholars are the co-inventors (with Robin Hanson) of the modern prediction markets. (According to Paul Rhode and Koleman Strumpf, prediction markets almost never got it wrong forecasting the 19 elections that took place from 1868 to 1940. PDF) On the other hand, the IEM monopoly is a real scandal.

Not only that, but two of the IEM scholars said scandalous things on InTrade-TradeSports. Here is what I wrote in 2005:

• The Iowa Electronic Market: Lessons Learned and Answers Yearned – (PDF) – by Joyce E. Berg and Thomas A. Rietz – 2005-01-00
  • Chris Masse’s comments:
    • I am not able to excerpt this paper. They locked the content, within Adobe Reader. Very smart. Congrats. Some scholars live with their time, I see.
    • In page 2, the authors treat TradeSports as “an online betting operation that has incorporated IEM-like contracts on political events, sometimes even duplicating IEM contracts.” Number one, just like IEM, TradeSports/InTrade is a real-money prediction exchange (a.k.a. a betting exchange, in the U.K.), where trading is going on, not an “online betting operation” (which is a moniker that would better qualify any Web-based bookmaker or sportbook). If you want people to have respect for IEM (a non-profit organization that monopolistically prospers on an anti-democratic CFTC graciosity), please show respect for innovative commercial ventures that create wealth and jobs and that form the basis of the capitalism that you’re supposed to study, as tenured professors of economics. Number two, nobody contests that IEM pioneered (political) prediction markets in 1988. Number three, thank God, financial innovation can’t be locked into tiny university laboratories and will always find a way to spread over in the real world of business, so as to benefit us all.

To be fair, IEM’s Joyce Berg took the defense of InTrade-TradeSports after the passing of the Internet Gambling Prohibition and Enforcement Act. (MP3 file)

On the matter of regulations, it’s important to understand that IEM is not regulated by the CFTC. It is exempted from CFTC regulation —they are free to do their trading and research, providing that they don’t do ads and that they cap accounts at $500. Russell Andersson of HedgeStreet, the first regulated US-based prediction exchange (betting exchange, event futures exchange), has stated that the CFTC is open to discussions on brand-new event derivatives. Plus, Deep Throat told us that the CFTC has already gave its stamp of approval to political event derivatives. Jason Ruspini thinks there’s a 50% probability that HedgeStreet will organize political prediction markets on the 2008 horse race.

And on the gambling/betting front, the US casinos are pushing for a Congress-funded analysis of the internet gambling and betting industry.

So, things are bad at this moment in America (IEM monopoly + InTrade-TradeSports being illegal), but it’s not going to stay that way for too long.

Previous: The Philadelphia Inquirer + Iowa Electronic Markets