Prediction Markets + Market Predictions = Collective Forecasting That Pays Off

Tag Archives: manipulations

The Commodity Futures Trading Commission and Securities and Exchange Commission will have authority to decide what derivatives must be centrally cleared rather than letting private parties make the call.

“Central clearing interposes a regulated clearinghouse between the original counterparties in a derivatives transaction and so creates an opportunity to make dealing more transparent.”
CNBC video

Feedback trading in prediction markets

Robin Hanson is schooled about prediction market trading.
Our guest author to our Master Of All Universes:
Feedback trading just means the kind of momentum trading that is pervasive in traditional assets, again, less so in prediction markets. In the biastest experiment, traders were given formal “clues” about the settlement, but for many market participants, the best [...]

The Robin Hanson manipulation papers make unrealistic assumptions, but it’s not like prediction markets are a bad idea…!!…

In terms of unrealistic assumptions in Robin Hanson’s series of papers on manipulation, the major ones have been out there since at least 2004.
Despite some limited evidence, the insistence on traders needing to know the direction of manipulation isn’t too compelling since the direction will be manifest insofar as the price is “wrong.” “Noise [...]

Paul Hewitt doubts.

Paul Hewitt:
Finally, we need to know if this was only possible, because it was a fairly simple experimental model. Will the same decision-maker’s ability exist in extremely complex public policy markets?

Could think tanks impact the socially valuable prediction markets?

- Matt Yglasias on the possibility of manipulations.
- Robin Hanson rebuts scientifically.

BetFair – Live Chat Session – Tuesday, January 27th, 2009

BetFair – Live Chat Session – Tuesday, January 27th, 2009 – [This link is only available to the BetFair registered users, alas. In the future, BetFair should make the transcripts of all chat sessions available to the public at large, in my view.]

Here is a transcript, transmitted to me by Mike Robb of BetFair —many [...]

Freakonomics is the latest in a long series of (usually, serious) bloggers who have misinformed the public by stating that the institutional investor is manipulating the US political election prediction markets.

The anonymous blogger (probably the editor, Annika Mengisen) titles the post, “A New Kind of Campaign Advertising?”, and asks:
Will market manipulation for political candidates become the norm as ever-wealthier campaigns try to control the news cycle?
No…!!!…
John Delaney said that that firm has been hedging on InTrade —a normal and beneficial activity on the other (larger [...]

The New York Times on InTrade’s US political election prediction markets

The NYT writers discusses 2 (different?) issues.
-
#1. There was market arbitrage opportunies in the recent past between InTrade and BetFair —unlike 4 years ago, and contrary to the laws of economics.
- The price of the Barack Obama event derivative was cheaper on InTrade than on BetFair and the Iowa Electronic Markets. Conversely, the price of [...]

Economics blogger Zubin Jelveh got it right about the InTrade hedging thing.

“No Manipulation At InTrade“
Exactly.
John Delaney said that that firm has been hedging on InTrade —a normal and beneficial activity on the other (larger and more liquid) financial markets.
InTrade is not liquid enough to weather (quickly enough) the impact made by the hedging activities, at this time, but will in the future, if growth continues.
Manipulation is [...]

A blogger at the New York Times misinforms the public about the alleged manipulations on the InTrade US political prediction markets.

The blogger titles the post, “Cheating the Spread”.
No…!!!…
John Delaney said that that firm has been hedging on InTrade —a normal and beneficial activity on the other (larger and more liquid) financial markets.
InTrade is not liquid enough to weather (quickly enough) the impact made by the hedging activities, at this time, but will in the future, [...]

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