The intelligence and security community also has mixed views. John F McCreary, the Chief Analysis Officer for KGS Security, who had a senior role at the United States Defense Intelligence Agency, notes that the National Intelligence Council successfully trialed prediction markets, until political pressure ended the experiment. However, he believes that, since they “violate the scientific principles of auditability, replicability and irrefutability”, they lack credibility. Retired Naval Intelligence Commander Jennifer Dyer sceptically points out that, “anyone who has bet on sports would be wary of the effects of a large, very specifically motivated group of bettors”. According to Professor Anthony Glees of the University of Buckingham, “there must be a few analysts in the FCO and at GCHQ looking at these sorts of websites but I doubt if they spend much time on them”.

See also the excellent analysis of Mike Smithson.

The main points:

1. The Keeling curve, measuring CO2 from the Mauna Loa Observatory. [See chart below.]
2. The retreat of numerous glaciers is shown in before-and-after photographs (see Retreat of glaciers since 1850).
3. A study by researchers at the Physics Institute at the University of Bern and the European Project for Ice Coring in Antarctica presenting data from Antarctic ice cores showing carbon dioxide concentrations higher than at any time during the past 650,000 years.
4. Temperature record since 1880 showing that the ten hottest years ever measured in this atmospheric record have all occurred in the last fourteen years.
5. A 2004 survey by Naomi Oreskes of 928 peer-reviewed scientific articles on global climate change published between 1993 and 2003. The survey, published as an editorial in the journal Science, found that every article either supported the human-caused global warming consensus or did not comment on it.

Real Climate:

[...] How well does the film handle the science? Admirably, I thought. It is remarkably up to date, with reference to some of the very latest research. Discussion of recent changes in Antarctica and Greenland are expertly laid out. He also does a very good job in talking about the relationship between sea surface temperature and hurricane intensity. As one might expect, he uses the Katrina disaster to underscore the point that climate change may have serious impacts on society, but he doesn’t highlight the connection any more than is appropriate [].

There are a few scientific errors that are important in the film. [...]

For the most part, I think Gore gets the science right, just as he did in Earth in the Balance. The small errors don’t detract from Gore’s main point, which is that we in the United States have the technological and institutional ability to have a significant impact on the future trajectory of climate change. This is not entirely a scientific issue — indeed, Gore repeatedly makes the point that it is a moral issue — but Gore draws heavily on Pacala and Socolow’s recent work to show that the technology is there [].

I’ll admit that I have been a bit of a skeptic about our ability to take any substantive action, especially here in the U.S. Gore’s aim is to change that viewpoint, and the colleagues I saw the movie with all seem to agree that [Al Gore] is successful.

In short: this film is worth seeing. It opens in early June.

External Link: Al Gore’s critics.

Previously: The London School of Economics chose InTrade-TradeSports over BetFair-TradeFair for floating event derivatives on global warming. + InTrade’s global warming prediction markets are more socially interesting than BetFair’s ones. + BetFair’s Global Warming Prediction Markets — CFM’s Views

[*] There are 3 “C”s actually. Those Irish bozos are not even able to spell it correctly. –> UNFCCC (United Nations Framework Convention on Climate Change). Look at the logo, below.

UPDATE: They have corrected the spelling on Saturday, December 15, 2007.

Previously: The London School of Economics chose InTrade-TradeSports over BetFair-TradeFair for floating event derivatives on global warming. + InTrade’s global warming prediction markets are more socially interesting than BetFair’s ones.

One of the great things about InTrade (recently split from TradeSports) is that they are open to suggestions from wide-eyed academics. [...]

Exactly.

Previously: The London School of Economics chose InTrade-TradeSports over BetFair-TradeFair for floating event derivatives on global warming.

Yesterday evening, Saturday, I blogged about InTrade’s global warming prediction markets, just opened. Today, Sunday afternoon, I have just found out, thanks to a tip from Ralf Martin, that the InTrade global warming prediction markets were actually set up in collaboration with the London School of Economics’ Centre for Economic Perfomance.

What will happen to global efforts to limit greenhouse gas emissions when the current commitment period of the Kyoto protocol ends in 2012? There are hopes that the United Nations (UN) climate change conference that started on 3 December in Bali will outline a road map for a successor agreement that might be reached in late 2009.

To know what is going to happen in 2012 and beyond is not only relevant for future generations but for a wide range of investment decisions today:

• Should you buy that flat in a riverside building?
• Should companies invest in R&D on carbon capture and storage technologies?
• Should governments provide more money to wind farm development or rather improve flood defences and relocate people living close to the coast?
• Should an energy intensive company relocate its production from an industrialised country to a developing country unlikely to be covered by a pollution target?

To make these choices wisely, we need forecasts on the likely outcome and design of any post-Kyoto agreement. There is no shortage of opinions on what is going to happen. But whom should you trust? Opinions will be influenced by wishful thinking and strategic positioning alike as well as being based on different insights into parts of the puzzle. For example, living in the rich world, you might have a good sense of what the typical voter in your country thinks about pollution targets, but what about Indian voters or the Chinese communist party?

If the UNFCC [*] – the UN body in charge of the climate change negotiations – was a publicly listed company whose profits depended on the climate change reduction targets it achieves, a good way of getting an idea on what’s going to happen is to have a look at its share price rather than public statements of its bosses or shareholders. This is obviously not a possibility. But what is possible now might be even better. [...]

[*] There are 3 “C”s actually. For Christ’s sake, be careful. –> UNFCCC (United Nations Framework Convention on Climate Change). Look at the logo, below.

UPDATE: They have corrected the spelling on their blog.

1. Uninformed traders will be able to trade their opinions. Most of the US citizens have an opinion (positive or negative) on the US Congress politics and the federal legislations.
2. Informed traders (hopefully, the market makers) will be able to follow some advanced indicators (in the Washington D.C. media, for instance) pertaining to this upcoming legislation (if any).

Once again, it shows that John Delaney’s InTrade is the King of the Prediction Markets —and that BetFair-TradeFair is painfully playing catch-up.

Here’s the InTrade contract statement for the US — (USA agrees before end of 2009 to reduce CO2 emissions by 10% or more by year 2025):

A contract will settle (expire) at 100 ($10.00) if the United States agrees before the end of 2009 to reduce CO2 emissions by the amount specified in the contract by the year 2025 (relative to the 1990 emissions baseline).

A contract will settle (expire) at 0 ($0.00) if the United States DOES NOT agree before the end of 2009 to reduce CO2 emissions by the amount specified in the contract by the year 2025 (relative to the 1990 emissions baseline).

Any reduction target must be part of a United Nations Framework Convention on Climate Change (UNFCC) [*] agreement reached before the end of 2009. Any agreement to reduce CO2 emissions made outside of the UNFCC will not be considered for expiry purposes.

A reduction target does not have to be ratified for the contracts to be expired – only agreed to under the UNFCC. [*]

Expiry will be based on official and public announcements from US officials or the UNFCC Secretariat, as reported in three independent and reliable media sources.

Due to the nature of this contract please also see Contract Rule 1.7 Unforeseen Circumstances.

The Exchange reserves the right to invoke Contract Rule 1.8 (Time Protection) if deemed appropriate.

Any changes to the result after the contract has expired will not be taken into account – Exchange Rule 1.4

Please contact the exchange by emailing help@intrade.com if you have any questions regarding this contract before you place a trade.

Important:
Please contact the Exchange if you have any query or uncertainty (including how it may be settled) about this Contract, the Rule above or the Contract Rules before you trade.

There are 4 other contracts (E.U., Russia, Japan, and China+India).

[*] There are 3 “C”s actually. Those Irish bozos are not even able to spell it correctly. –> UNFCCC (United Nations Framework Convention on Climate Change). Look at the logo, below.

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UPDATE: Mike Linksvayer’s comment…

They’d be even more interesting if offered in combination with electoral outcomes and more yet if offered in combination with climate outcomes. I’m happy to see BINLADEN+MUSHARRAF contracts recently added, but volume is almost nil. Intrade (or someone new) will need better technology to be really socially interesting — be a source of many contingent probabilities. Many explicit combination contracts is just unworkable. I’m also happy to see Intrade offering several multi-year contracts, of which the climate ones are a good example. I believe the Google Lunar contract is currently the longest term one, expiring in 2012. I’m rooting for Intrade and for something better to come along, simultaneously.

UPDATE #2: I have just found out, this Sunday afternoon, thanks to a tip from Ralf Martin, that the InTrade global warming prediction markets were set up in collaboration with the London School of Economics’ Centre for Economic Perfomance.

UPDATE #3: InTrade have corrected the spelling on Saturday, December 15, 2007.

NEXT: The London School of Economics chose InTrade-TradeSports over BetFair-TradeFair for floating event derivatives on global warming.

#1. Very few readers do subscribe to our prediction market blogs using a (PC-based or Web-based) feed reader —although, on Midas Oracle, the number of subscribers is higher than the daily visitors coming directly from browser bookmarks (i.e., other than the people coming from Google Search, which is very high).

#2. Other than CFM, Midas Oracle and Odd Head, the prediction market blogs are equivalent to self masturbation (i.e., onanism) —this said with all due respect to their authors (in particular those “from the London School of Economics”).

#3. The future belongs to often-updated group blogs (with substantial participation).

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First, I give you the numbers for CFM and MIDAS ORACLE. Then, I give you the numbers for the other prediction market blogs.

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#1. PC-based feed subscribers: a big number.

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#2. Web-based feed subscribers:

CFM: 205 subscribers
Midas Oracle: 283 subscribers (that is, not including 14 comment subscriptions)

Google Reader + Google IG
83 CFM
134 MO post feed
11 MO comment feed
6 MO best-post feed

BlogLines
51 CFM
47 MO post feed
3 MO comment feed
3 MO best-post feed

NetVibes
45 CFM
44 MO post feed
0 MO comment feed
26 MO best-post feed

NewsGator
13 CFM
17 MO post feed
0 MO comment feed
1 MO best-post feed

My Yahoo!
7 CFM
3 MO post feed
0 MO comment feed
0 MO best-post feed

Rojo
5 CFM
2 MO post feed
0 MO comment feed
0 MO best-post feed

Pluck
1 CFM
0 MO post feed
0 MO comment feed
0 MO best-post feed

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Other Prediction Market Blogs:

- JUST FOR COMPARISON –> Marginal Revolution (by Tyler Cowen): +2,768 subscribers at BlogLines

- NOT REALLY A PREDICTION MARKET BLOG –> OvercomingErrors (by Robin Hanson et al.): 70 + 51 = 121 subscribers at BlogLines

- Risk Markets And Politics (by Jason Ruspini): 53 subscribers at BlogLines

- Odd Head (by David Pennock, of Yahoo! Research): 41 subscribers at BlogLines

- Hollywood Stock Exchange blog (by David Perry): 20 subscribers at BlogLines

- Consensus Point blog (by David Perry): 18 subscribers at BlogLines

- Inkling Markets blog (by Adam Siegel): 17 subscribers at BlogLines

- Alea (by JC Kommer): 17 subscribers at BlogLines

- Betting Market site feed (by Niall O’Connor): 12 subscribers at BlogLines

- TradeSports site feed (by John Delaney et al.): 10 subscribers at BlogLines

- Nasty, Brutish And Tall (by Steve Roman): 8 subscribers at BlogLines

- InTrade site feed (by John Delaney et al.): 5 subscribers at BlogLines

- NewsFutures blog (by Emile Servan-Schreiber): 5 subscribers at BlogLines

- Bo Cowgill blog (by Bo Cowgill): 4 subscribers at BlogLines

- CASTrader (by Alan Jewell): 3 subscribers at BlogLines

- Usable Markets (by Alex Kirtland): 2 subscribers at BlogLines

- Caveat Bettor (by Caveat Bettor): 2 subscribers at BlogLines

- Mercury blog (by Jed Christiansen, “from the London School of Economics”): 2 subscribers at BlogLines

- SmartCrowd (by”Paul”): 2 subscribers at BlogLines

- The Political Maven (by Alex Forshaw): 1 subscriber at BlogLines –> moi

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Technical Note: The feeds generated by the blogging software were added to BlogLines, when possible —preferably not the FeedBurner feeds (for personal, aesthetic reasons). So it could be that the audience of one or two blogs in the listing are underestimated.

Have you tried Betfair? www.betfair.com . Chris Masse over at Midas Oracle www.midasoracle.com — the main prediction markets blog — tends to support them over InTrade. The interface is not as nice as InTrade’s though (they give punter odds rather than decimal probability prices).

#1. BetFair won’t let any U.S. resident opens an account, because BetFair has decided to abide by US laws. (See: “We wish to reiterate our well documented and long-standing policy of not accepting US customers, funds, or bets.“) That said, some US residents have managed to open BetFair accounts via the complicity of British friends. As you all know, TradeSports-Intrade was created and became successful on two premises: number one, BetFair won’t enter the US market until it is legal, and, number two, US-based prediction exchanges (betting exchanges, event futures exchanges other than hedging-oriented) are not legally allowed to perform operations. Thus, the situation we have today: TradeSports-Intrade is the de facto monopoly in the US market of unregulated event derivatives. (MatchBook is trying to pierce with a marketing strategy a la TradeBetX. And, of course, online sportsbooks are TradeSports-Intrade’s competitors.)

#2. There are many real-money prediction exchanges (betting exchange, event futures exchanges). To trade or to get probabilities, you should select the one that has the most volume on the (regulated or unregulated) event derivative you’re interested in. For US politics, it’s TradeSports-InTrade. For British and Irish politics, it’s BetFair.

#3. BetFair is indeed a formidable operator —big, powerful, ethical, with a fantastic technical team, and a robust and sophisticated software. Very long term, BetFair is going to take over Trade-Sports-InTrade in the US.

#4. The prices (which the economists allow us to interpret as probabilities, when these prices come from prediction exchanges, as opposed to bookmakers) can be expressed in four ways: 0–100, American, fractional or decimal. It’s all equivalent. For instance, you take the number “1″, you divide it by the BetFair’s “last price matched” expressed as”decimal odds”, you multiply it by “100″, and you get your 0–100 price/probability.

BetFair: Republican Nicolas Sarkozy as next French President

Total matched on this event: $728,806
Betting summary – Volume: $463,083
Last price matched: 1.32 ["1" divided by "1.32" and multiplied by "100" = 75.8%]

BetFair explainer on decimal odds:

What are Decimal Odds?
All prices quoted on Betfair are ‘Decimal’ Odds. Decimal Odds differ from the Odds traditionally quoted in the UK in that they include your stake as part of your total return. If you place a bet of £10 at Decimal Odds of 4.0 and win, then your total return (including stake) is £40. In the UK this would be quoted as 3/1, returning to you winnings of £30 plus your original stake of £10.
Decimal Odds are simpler to use than Traditional Odds, and are the most common form of Odds quoted in countries outside the UK. In addition, for the mathematically minded, Decimal Odds relate more closely to probability: in a race with four equally-matched horses, the probability of each horse winning is 25%. Each horse will have Traditional Odds of 3/1 or Decimal Odds of 4.0. Hence, the probability of an outcome equals 1 divided by its Decimal Odds (1 / 4.0 = 25%).
Decimal Odds also offer many more prices – Betfair offer every price between 1.01 and 2.0 to two decimal places. With no margins to protect, our customers deserve to see every price available.

#5. Any software for prediction markets (and betting exchanges) should be able to convert the prices in these four different formats —on top of being translated in many foreign languages.

#6. British consultant wannabe Jed Christiansen, freshly minted “from the London School of Economics”, has a new blog post out (he blogs on a monthly basis) on BetFair versus TradeSports-InTrade (BetFair being “betting”, and InTrade-TradeSports being “financial”), which is the most ridiculous statement I have ever read since Paris Hilton declared to the world that she was going to morph herself into a “savvy business titan”.

- Jed Christiansen tries to divine the “psychological approach” of BetFair and TradeSports-InTrade. Oh, mon Dieu!… Jed Christiansen’s thinking is rotten from the start. Just like the beauty is in the eye of the beholder, the marketing “approach” is conditional to its adoption by the customers/consumers. Any popular products (here, event derivatives, prediction markets) belong to its customers/consumers (here, the traders and the info consumers), and then the “approach” is to listen to the improvement they suggest to the service. Any incremental innovation of your prediction market software is just the anticipation of future traders’ needs. Event derivative traders on both sides of the Atlantic have the same needs. The traders are in the driver’s seat. If they are satisfied, they patronize and come en masse (no pun intended), and if they are not, they leave. Traders don’t give the first fig about the “psychological approach” of the prediction exchanges. You can’t spin the British and Irish traders one way, and the American and Canadian traders another way. Trader’s needs are imperial and universal. It’s the traders who shape the prediction exchanges (betting exchanges) their way.

- Jed Christiansen makes a big fuss out of tiny differences between BetFair and TradeSports-InTrade. For instance, BetFair outputs prices as “decimal odds”, and, of course, the Grand Inquisitor views it as a sign from God that BetFair is “betting”. But that’s bullshit, as the readers of Midas Oracle all know. With a simple computation, you can transform the “decimal odds” into 0–100 prices. (You take the number “1″, you divide it by the BetFair’s “last price matched” expressed as”decimal odds”, you multiply it by “100″, and you get your 0–100 price/probability.)

- BetFair uses the words “back” and “lay” (instead of “bid” and “ask”) and the Grand Inquisitor views it as yet another sign from God that BetFair is “betting” (as opposed to “financial”).

- Jed Christiansen states that the “psychological approach” of BetFair (being “betting”) is dictated by the fact that its competitors are the British bookies (and the online bookmakers, I will add). The main competitors of InTrade-TradeSports are the US illegal bookmakers and the offshore sportsbooks. BetFair and InTrade-TradeSports both have the same kind of competitors, the fixed-odds bookmakers. (Being illegal in America, InTrade-TradeSports can’t market to the sophisticated US horse race bettors.)

Jed Christiansen has opted for religion over theory. He religiously believes that BetFair is “betting” and InTrade-TradeSports is “financial”, and he will take any insignificant piece of evidence to make his case.

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External Link: Nisan Gabbay on BetFair

Previous: BetFair Case Study – Betting Exchange – Prediction Markets

[...] Betfair on the other hand was built like a stock market exchange, where odds functioned as the share prices. [...]

UPDATE: Yahoo! research scientist David Pennock comments…

I think Jed Christiansen is correct to a large degree. Betfair speaks the punter’s (gambler’s) language. TradeSports speaks Wall Street’s language. I have a bookie friend who upon first look at TradeSports couldn’t make heads or tails of it. Chris is right in that both betfair and TradeSports perform the same service. However their target audience, at least initially, is different.

NEXT: User Interface & Target Audience: BetFair, TradeSports-InTrade, MatchBook, etc.

UPDATE: Jed Christiansen…

That was the point I was trying to make. In the end, both types of sites accomplish the exact same thing; an event futures market. But I was pointing out the differences in how the sites work that come from their positioning in the marketplace.

In my perfect world, a trader could choose how they interacted with an exchange. They could choose a basic interaction, or a user interface with lots of options. They could choose to see contracts in decimal odds or percentages, etc. It’s not as easy as it sounds, which is why we probably haven’t seen it yet.

UPDATE: David Stalcup…

In fact you can see odds listed decimal, 0–100 prices or moneyline format (-110) at TradesSorts. You just make that choice at TradeBetX with your TradeSports login info. You have the option of viewing odds in any format. TradeBetX/TradeSports are the same company, just different branding and options at TradeBetX.