Midas Oracle .ORG » prediction market industry

The prediction market industry ditches John Maloney –finally.

Chris F. Masse — Mon, 09 Nov 2009 18:10:21 +0000

It was about time, and it is good news.

From: Emile Servan-Schreiber, NewsFutures

To: all friends of prediction markets:

A number of us have been talking recently and we are in agreement that the existing forums for prediction market enthusiasts and watchers, owned and controlled by single individuals, are lacking. We think the industry deserves its own independent, open, community-owned discussion forum. As such, we have created a new Google Group dedicated to fostering and furthering high-quality open debate and communication about prediction markets: the R&D, the theory, the practice, the industry developments and upcoming events.

We strive for an open discussion and we commit to run the group with transparency, openness, objectivity, and independence. But we also believe some ground rules are needed to maintain a high quality of conversation that minimizes advertising, second-hand PR, or anyone monopolizing the conversation. We think some vigilance along those lines will make a positive difference in the communication and discussion. We hope you do too!

To join our new discussion group, click here:
http://groups.google.com/group/prediction-markets-open-discussion

Sincerely,

Oliver Bernhard Pedersen
Jed Christiansen
Bo Cowgill
Forrest Nelson
David Pennock
Emile Servan-Schreiber
Adam Siegel
Justin Wolfers

http://www.pmindustry.org/

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BetFair is world’s third most valuable Internet startup.

Chris F. Masse — Thu, 29 Oct 2009 14:30:18 +0000

The Silicon Alley Insider 50+ Top Ten:

1. Facebook

2. Wikipedia

3. Betfair

4. NewEgg

5. Craigslist

6. Mozilla

7. Yandex

8. Webkinz (aka Ganz)

9. GoDaddy

10. Demand Media

Some prediction market companies brag too much.

Chris F. Masse — Fri, 25 Sep 2009 15:43:17 +0000

Here is what Cédric Gaspoz has published on the San Francisco clown’s e-mailing list:

Hi, thanks to “Google” [the description line concocted by the website owners and which Google displays in its search results] or better, thanks to their own PR guys, we can ranks the PM vendors:

1/ Leaders
InTrade: THE Leading Prediction Market
Consensus Point: the leading provider of business prediction market…
NewsFuture: Leader in Prediction Market Solutions for Entreprise
Crowdcast: the leading provider of prediction market solutions for collective forecasting
HSX: the world’s leading entertainment stock market

2/ Pack members
Inkling: Business Intelligence Using Prediction Markets
Nosco: state of the art Idea Mangement software based on prediction markets
Pro:kons: The software solution for Prediction Markets and consensus building
Qmarkets: Qmarkets provides Enterprise prediction markets & idea management software, for innovation, sales forecast & decision support
Spigit: Spigit is innovation software designed to connect and analyze your social networks, communities, partners and customers
Exago Markets: Solutions Exago Markets focus on three major areas: support to the process of management ideas, testing concepts within and outside the organization and forecast of future events
TradeSmarter: Binary Options Trading platform of real time trading on forex options, stocks and commodities. Binary Options is the simplest way to take a position on economic events, letting you speculate on your financial views.

Nice to see so many (world) leaders. Thanks Jennifer for making us laugh.

Regards
Cédric

Based on what metric, exactly?

Chris F. Masse — Thu, 24 Sep 2009 17:32:54 +0000

… asks our good doctor Emile Servan-Schreiber of NewsFutures, on the San Francisco clown’s e-mailing list.

The answer is simple: The San Francisco clown (who hides behind the e-mail account of that young lady) will say anything for money. Whoever sponsors his phone-booth conference will be crowned as “the leading provider of prediction market solutions for collective forecasting”. For the San Francisco clown, the only metric is money (to him).

P.S.: At Midas Oracle, we like NewsFutures, CrowdCast and Inkling Markets for their merits —no need to bribe us.

Should you be bullish on enterprise prediction markets?

Chris F. Masse — Fri, 22 May 2009 10:42:13 +0000

Robin Hanson:

There is now a prediction market industry, where I do a lot of consulting, most of which is to private companies. Most of these are on prediction markets, but some are decision markets.

What Robin Hanson does not say to his gullible readers (mostly, young collegians who have no experience of real-life forecasting) is that:

When you ask any non-ideological researchers, these days, on the value of prediction markets over simpler collective intelligence mechanisms, they tell you either that the benefit is very, very small or that it is non measurable (i.e., it probably does not exist).
Half of the so-called EMP industry (a microscopic industry that lives on hype and trial balloons, it should be said), which Robin Hanson is so proud to belong to, has abandoned enterprise prediction markets. Notably, NewsFutures (founded by a Robin Hanson fanboy, and advised for years by Robin Hanson himself) and CrowdCast (a VC-backed venture) have (independently of each other) decided to stop selling proposing EPM SaaS only to customers, and focused instead on simpler and more social mechanisms. For more information, I recommend my readers to go conversing with Emile Servan-Schreiver of NewsFutures, who has a lot to say about this issue. Emile is well versed into both the research and the practical sides of collective intelligence used within companies. [UPDATE: See Emile's comment.] Mat Fogarty (who, him, as experience in real-life forecasting for business) and Leslie Fine (a scientist) of CrowdCast are also good interlocutors.

Contrary to Overcoing Whatever, Midas Oracle publishes both the good and the bad about prediction markets. We do not censor the bad news. We do not cherry-pick the good news. You will notice, in the near future, that we will publish information that supports the opposite thesis (that is, EPMs are the panacea), and then we will link to Inkling Markets as the best interlocutor in town. We try to publish about both sides (EPMs are no good, EPMs are good), not because we are “bi-polar”, but because the jury is still out on this matter, and our readers need to have both arguments put under their very nose. Act one today.

How come prediction exchanges are ranking so low for American Idol?

Chris F. Masse — Thu, 21 May 2009 17:19:53 +0000

Midas Oracle has received many visitors from Google this week, thanks to the great work of Ryan from HubDub. I tried to understand why. Turn out when you type “american idol prediction market” (you can add the “s” at the end), Midas Oracle is on top, with HSX, BetFair and HubDub far behind. As for InTrade, Google points to a 404 from InTrade .NET. Miserable.

As I said the other day, our prediction exchanges don’t have the first clue about working with the search engines, for the sad reason that their managers are not Internet literate. This is an opportunity for any savvy prediction market startup to take over the old giants who have this Achilles’ heel.

CrowdCast want to hire the world.

Chris F. Masse — Fri, 24 Apr 2009 16:30:46 +0000

- A prediction market consultant.

- A sales leader.

Crowdcast is the leading provider of prediction market solutions created exclusively for the enterprise.

Hummm… The leaders are NewsFutures and Inkling Markets. But maybe CrowdCast will take the lead, later on, that well might be. Jed Christiansen wants to set up some kind of procedure to assess the size of the EPM industry. It might work at the condition that everybody tells the truth. If you have one liar in the set, it will derail the whole process, because the others will get to lie, too. Tricky…

The most urgent task, though, as I have repeated here, is to publish specific business cases that justify the use of our information aggregation mechanisms.

Global Horse Race Betting Exchange

Niall O'Connor — Thu, 16 Apr 2009 08:54:56 +0000

Mark Davies of Betfair will attend the Standardbred Wagering Conference, at Caesars Windsor from Tuesday, April 28 – 29, 2009. He will sit on the “Life After Pari Mutuel Wagering?” panel.

It is to be hoped that Davies will make some headway with regard to promoting the notion of a global horse race betting exchange, as the answer to the horse racing industries’ woes.

The totalisator pool betting system is an anachronism that has failed both the horse racing industry and those that bet on the sport. It has survived through a combination of self-interest, inertia and fear of the unknown.

A global betting exchange dedicated solely to horse racing represents the logical way forward.

The truth about (enterprise) prediction markets

Chris F. Masse — Mon, 13 Apr 2009 08:20:48 +0000

Paul Hewitt:

[...] In virtually every case, the prediction market forecast is closer to the official HP forecast than it is to the actual outcome. Perhaps these markets are better at forecasting the forecast than they are at forecasting the outcome! Looking further into the results, while most of the predictions have a smaller error than the HP official forecasts, the differences are, in most cases, quite small. For example, in Event 3, the HP forecast error was 59.549% vs. 53.333% for the prediction market. They’re both really poor forecasts. To the decision-maker, the difference between these forecasts is not material.

There were eight markets that had HP official forecasts. In four of these (50%), the forecast error was greater than 25%. Even though, only three of the prediction market forecast errors were greater than 25%, this can hardly be a ringing endorsement for the accuracy of prediction markets (at least in this study). [...]

To the despair of this man, Paul’s analysis is quite similar to mine (circa February 14, 2009):

The prediction market technology is not a disruptive technology, and the social utility of the prediction markets is marginal. Number one, the aggregated information has value only for the totally uninformed people (a group that comprises those who overly obsess with prediction markets and have a narrow cultural universe). Number two, the added accuracy (if any) is minute, and, anyway, doesn’t fill up the gap between expectations and omniscience (which is how people judge forecasters). In our view, the social utility of the prediction markets lays in efficiency, not in accuracy. In complicated situations, the prediction markets integrate expectations (informed by facts and expertise) much faster than the mass media do. Their accuracy/efficiency is their uniqueness. It is their velocity that we should put to work.

Prediction markets are not a disruptive technology, but merely another means of forecasting.

Go reading Paul’s analysis in full.

I would like to add 2 things to Paul’s conclusion:

We have been lied to about the real value of the prediction markets. Part of the “field of prediction markets” (which is a terminology that encompasses more people and organizations than just the prediction market industry) is made up of liars who live by the hype and will die by the hype.
Prediction markets have value in specific cases where it could be demonstrated that an information aggregation mechanism is the appropriate method that should be put at work in those cases (and not in others). Neither the Ivory Tower economic canaries nor the self-described prediction market “practitioners” have done this job.

What’s the big deal about the fluff on prediction markets in The Economist?

Michael Giberson — Thu, 05 Mar 2009 20:10:53 +0000

Chris Masse has posted several times about the recent piece on prediction markets in The Economist. Among his recent grand pronoucements:

“If you are a prediction market consultant, and have nothing to say about the negative piece from The Economist, then you don’t matter anymore.”

Really?

What is it that The Economist said that prediction market consultants should have something to say about?

I read article when it showed up online, and then again when the print version arrived and after Chris mentioned it at Midas Oracle, and now a third time since I wonder why he is making a big deal of it.

Fortunately, it is a light read – reading it three times has not been particularly taxing. But there is not much depth to engage: An intro paragraph, some explanation, three brief examples-two of which illustrate implementation problems, and then the article concludes with a quip that “Perhaps the best way to find out when prediction markets will finally take off is to ask your employees–using a prediction market.”

That’s it.

No searing indictment of the prediction market software vendors and consulting business, no challenge to the theoretical foundations of prediction markets, no rejection of the “wisdom of the crowds.” All the article does is observe that the tool has “yet to take off.”

So my question to Chris remains, “What is it that The Economist said that prediction market consultants should have something to say about?”

(Cross-posted from Knowledge Problem.)