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.

-

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. Objective 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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2008 US Elections

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InTrade

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2008 US Electoral College

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- This is a dynamic electoral map, which is up to date. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version.

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- This is a dynamic electoral map, which is up to date. Feed readers: Download this webpage to visualize this InTrade widget.

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Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

-

- All the charts below are also dynamic —they update themselves each time you open this webpage.

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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 Congressional Elections 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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Sources:
- The dynamic, compound prediction market charts are from InTrade .COM.
- The individual charts, however, are from InTrade .COM v2. We will later transition to the charts from InTrade .COM when the charting quality of their widgets improves.
- We are also waiting to be able to hot-link to the advanced charts of InTrade .COM.

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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

-

-

Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Real Clear Politics – Polls

- Electoral-Vote.com – Polls

- Five Thirty Eight – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

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-

Canadian Elections

-

-

InTrade

-

Winner of Next Canadian Federal Election – Political Party

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Conservatives

-

Liberal

-

-

BetFair

-

2008 Federal Election

-

Most Seats

-

Overall Majority

-

-

UK Elections

-

-

BetFair

-

Next General Election – Most Seats

-

Next UK Prime Minister

-

-

InTrade

-

Winner of Next UK Election – Political Party

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UK Conservatives

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UK Labour

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The Prediction Exchanges

- 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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Charts Of Expired Prediction Markets

- Charts Of Expired Prediction Markets

- Other Charts Of Expired Prediction Markets

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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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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.

-

-

#1. Explainer On Prediction Markets

-

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.

-

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

-

-

#2. Probabilistic Predictions = Charts Of Prediction Markets

-

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.

-

-

InTrade

-

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

-

- 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

-

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

-

Winning Party

-

Next US President

-

Source: BetFair Politics Zone

-

-

Iowa Electronic Markets

-

2008 U.S. Presidential Election Vote Share Market

-

2008 U.S. Presidential Election Winner-Take-All Market

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- Source: Iowa Electronic Markets

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-

NewsFutures

-

Next US President Will Be Democratic.

© NewsFutures

-

Next US President Will Be Republican.

© NewsFutures

-

-

HubDub

- HubDub’s prediction markets on the 2008 electoral college

-

-

- 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

-

-

Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Electoral-Vote.com

-

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

-

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Noam Scheiber:

1.) Hillary wins both Ohio and Texas.
2.) Hillary wins Ohio; Obama wins Texas.
3.) Obama wins both Ohio and Texas.

I put in bold the most likely scenario, according to InTrade’s prediction markets.

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The Democrats

Ohio

Texas

Vermont

Rhode Island

The Republicans

Ohio

Texas

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Ohio

Texas

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Explainer On Prediction Markets

-

Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out… Intelligence in, intelligence out…

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 can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 6 times out of 10, the favored outcome will occur; and 4 times out of 10, the unfavored outcome will occur.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

-

More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- The Midas Oracle Explainers On Prediction Markets

-

Probabilistic Predictions = Charts Of Prediction Markets

-

2008 US Presidential Elections

Source: Dynamic, compound prediction market charts from InTrade

-

2008 US Presidential Election Winner – Individual

-

2008 US Presidential Election Winner – Political Party

-

2008 Democratic Nominee

-

2008 Republican Nominee

-

2008 US Senate Control

-

2008 US House Of Representatives Control

-

BetFair

-

Next US President

-

Winning Party

-

Female President?

-

Democratic Candidate

-

Republican Candidate

-

Source: BetFair Politics Zone

-

NewsFutures

-

Presidential Prediction Markets

-

Next US President Will Be Democratic.

© NewsFutures

-

Next US President Will Be Republican.

© NewsFutures

-

Democratic Nominee

-

Hillary Clinton

© NewsFutures

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Barack Obama

© NewsFutures

-

Republican Nominee

-

John McCain

© NewsFutures

-

Sources: InTrade & BetFair & NewsFutures & Bet2Give

- List of the main real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

-

- CNN US Political Dashboard

- Yahoo! News US Political Dashboard

- Political Base – Polls

-

3 great prediction market blogs:

- Caveat Bettor

- Alpha Thesis

- Political Betting (U.K.) — right-click on the image below, and open the link in another browser tab…

-

Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out… Intelligence in, intelligence out…

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 can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 6 times out of 10, the favored outcome will occur; and 4 times out of 10, the unfavored outcome will occur.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

-

2008 US Presidential Elections

Source: Dynamic, compound prediction market charts from InTrade

-

2008 US Presidential Election Winner – Individual

-

2008 US Presidential Election Winner – Political Party

-

2008 Democratic Nominee

-

2008 Republican Nominee

-

2008 US Senate Control

-

2008 US House Of Representatives Control

-

BetFair

-

Next US President

-

Winning Party

-

Female President?

-

Democratic Candidate

-

Republican Candidate

Source: BetFair Politics Zone

-

NewsFutures

-

Next US President Will Be Democratic.

© NewsFutures

-

Next US President Will Be Republican.

© NewsFutures

-

Democratic Nominee

-

Hillary Clinton

© NewsFutures

-

Barack Obama

© NewsFutures

-

-

-

#1. Explainer On Prediction Markets

-

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. These event derivative traders feed on the primary indicators —i.e., the primary sources of information. (Garbage in, garbage out… Intelligence in, intelligence out…) Hence, prediction markets are meta forecasting tools.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

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 can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 60 times out of 100, the favored outcome will occur; and 40 times out of 100, the unfavored outcome will occur.

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.

-

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

-

-

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

-

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.

-

-

2008 US Elections

-

-

InTrade

-

2008 US Electoral College

-

- This is a dynamic electoral map, which is up to date. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version. – [Feed readers: Download this webpage to visualize this InTrade widget.]

-

- This is a dynamic electoral map, which is up to date. – [Feed readers: Download this webpage to visualize this InTrade widget.]

-

Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

-

- All the charts below are also dynamic —they update themselves each time you open this webpage.

-

2008 US Presidential Election Winner – Individual

-

2008 US Presidential Election Winner – Political Party

-

2008 US Congressional Elections Winner – Political Party

-

2008 US Senate Control

-

2008 US House Of Representatives Control

-

Sources:
- The dynamic, compound prediction market charts are from InTrade .COM.
- The individual charts, however, are from InTrade .COM v2. We will later transition to the charts from InTrade .COM when the charting quality of their widgets improves.
- We are also waiting to be able to hot-link to the advanced charts of InTrade .COM.

-

-

BetFair

-

Winning Party

-

Next US President

-

Source: BetFair Politics Zone

-

-

Iowa Electronic Markets

-

2008 U.S. Presidential Election Vote Share Market

-

2008 U.S. Presidential Election Winner-Take-All Market

-

- Source: Iowa Electronic Markets

-

-

NewsFutures

-

Next US President Will Be Democratic.

© NewsFutures

-

Next US President Will Be Republican.

© NewsFutures

-

-

HubDub

- HubDub’s prediction markets on the 2008 electoral college

-

-

Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Real Clear Politics – Polls

- Electoral-Vote.com – Polls

- Five Thirty Eight – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

-

-

Canadian Elections

-

-

InTrade

-

Winner of Next Canadian Federal Election – Political Party

-

Conservatives

-

Liberal

-

-

BetFair

-

2008 Federal Election

-

Most Seats

-

Overall Majority

-

-

UK Elections

-

-

BetFair

-

Next General Election – Most Seats

-

Next UK Prime Minister

-

-

InTrade

-

Winner of Next UK Election – Political Party

-

UK Conservatives

-

UK Labour

-

-

The Prediction Exchanges

- 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

-

Charts Of Expired Prediction Markets

- Charts Of Expired Prediction Markets

- Other Charts Of Expired Prediction Markets

-

-

IMPORTANT: Expiry of 2008 US Election Contracts

Tuesday, Oct 30, 2007

We would like to advise a change in expiry procedure for contracts in the following group:

2008 Presidential Election Winner (Individual)

We originally planned to merge the contracts listed in this group for the Republican and Democratic Party nominees with the contracts we have listed for each party in the 2008 Presidential Election Winner (Political Party) group. This was to be done once the party nominees were official decided.

We have now decided against merging the contracts and both contract groups will now remain open and will be expired separately once the result of the election is known. The contract rules have now been amended to reflect this change.

The Exchange may leave contracts in winning individual group open once a party nomination is official to guard against a change in nominee between party conventions or any other unforseen circumstances that may arise.

The Democratic and Republican presidential nominee contracts will be expired after the nominations are made official at the respective party conventions, and not after the primaries have been completed. This is to guard against any change in the presumptive nominees between the end of the primaries and the conventions. These expiries will be final and any changes to the nominees after the convention, for whatever reason, will not be considered. Some contracts listed may be expired after the primaries but this decision will be made after the primaries have been completed.

If you have any questions about this pelase contact the Exchange on help@intrade.com.

InTrade-TradeSports

- Republican nominee

- Democratic nominee

- Next US President

- Political Party of the Next US President

—

- Should Slate add FT Predict in the odds comparison table?

- Slate has output an “explainer” on the legality of the prediction markets, which is the most insipid take I have ever read on Slate since the inception of this online magazine in the mid-nineties.

- See Slate’s 2007 guide to prediction markets, if you haven’t read it already.

Other External Link: Event Markets Evolve: Legal Certainty Needed. – [legalization of U.S.-based prediction exchanges] – by Paul Architzel (ex-CFTC) – 2006-03-??

I am asked by mister Steve Roman (who has a vested interest in the subject of political assassination) to substantiate my claim that “TradeSports-Intrade is careful to exclude assassination as possible expiry cause.”

I have looked at many “Rules” tabs, at InTrade V2, and here’s what I found: in some parts of the InTrade site, the assassination exclusion is mentioned, and in other parts of the InTrade site, it is absent.

—

#1. Alberto Gonzales Resignation Contracts

a) Contract statement on the Gonzales prediction market:

These contracts do not cover the death of the person named in the contract. In the event of the named person’s death before the expiry date of the contract the contract will be unwound, all trades reversed and all trading fees refunded.

b) “Rules” tab of the event derivative pop-up window:

[No mention of the "death" rule.]

#2. 2008.PRES.GIULIANI

“Rules” tab of the event derivative pop-up window:

In the unlikely event of the untimely death of one of the named individuals, all trades will be unwound and fees reimbursed to members accounts. (This only applies to contracts that have not been merged with a Political Party contract).

#3. 2008.GOP.NOM.GIULIANI

“Rules” tab of the event derivative pop-up window:

Clarification (20 March 2007): In the unlikely event of the untimely death of one of the named individuals all trades will be unwound and fees refunded.

Previous: What if, God forbids, some mad man GUNNED DOWN World Bank’s Paul Wolfowitz??

1. Probably, a TradeSports employee using a template has forgotten to delete an old text pertaining to US election prediction markets, while filling the “Rules” tab. (The webpage for the text of the contract is OK, though.)
2. What’s interesting: This contract institutes a blog (Real Clear Politics) as the exclusive source of information used for contract expiry. RCP computes “poll averages” (Approve/Disapprove), which will be the basis of TradeSports’s judgment on the bet, on D day. The key, in my view, is whether traders will trust this mechanism. Volumes are low, as of today; we will see.
3. Another factor is this: Which advanced indicators could traders trust to predict future Bush approval ratings? Oil price? S&P?
4. For more information on prediction markets with continuous variables, see Chris Hibbert’s recent blog post.

Thanks for your attention,

Chris Masse

Addendum: The glitch on the “Rules” tab has now been corrected. (Time stamp: Wednesday, September 27, 2006 – 11 AM EST)

Addendum 2: On the “Rules” tab, the text pertaining to US elections is now… back. (Time stamp: Wednesday, September 27, 2006 – 2 PM EST) Here’s the full text of what’s on the “Rules” tab. In bold, the portion of text pertaining to US elections. Following is the text of the contract pertaining to Bush approval ratings.

QUOTE

Politics

Election Contracts
0-100 Candidate/Political Party A wins: The expiry will be 100 if Candidate A wins the specified election/nomination and 0 if he/she does not.
The Result:
The expiry price is determined by the final result of the election as determined by the authorized Board of elections or similar regulatory body.
For Political Party contracts any tie will be broken by the authorized Legislative procedures that are used to break ties.
Postponement:
If the election is postponed until another date, the contract expiration date will be moved according. Similarly if the final count is delayed the contracts will remain open until the result from the final count is officially declared.

Presidential Job Approval Rating Contracts

A contract will expire at 100 if the published job approval rating is on or above that specified in the contract. If not then the contract will expire at 0.

These contracts will be expired based on President Bush’s job approval rating figure as published on Real Clear Politics (Click Here).

The RCP Average – Approve figure published on this site will be used for expiry purposes.

The contract will be expired once the RCP Average Approval figure for date range including November 7th is available.

If George W. Bush ceases to be President of the United States before expiryof these contracts then all contracts will become void, all trades unwound and all trading fees refunded.

Due to the nature ofthis contract please also see Contract Rule 1.9 -Unforeseen Circumstances
Please contact us with any queries by emailing help@tradesports.com

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.

UNQUOTE

Addendum 3: The portion of text pertaining to US elections, and which has nothing to do with the Bush approval ratings contract, has now been re-deleted from the “Rules” tab, if you can believe it. (Time stamp: Thursday, September 28, 2006 – 12 PM EST) I wonder whether it is an error from a human operator or a software glitch. I sent an e-mail yesterday to CMO Matt Bonner; no reply yet.

Addendum 4: The faulty text is back. It’s a software glitch, probably. (Time stamp: Thursday, September 28, 2006 – 8 PM EST)