-

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InTrade

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Democratic Vice President Nominee

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Republican Vice President Nominee

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BetFair

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Next Vice President:

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Democratic Ticket

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Democratic Vice President Nominee

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Republican Vice President Nominee

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NewsFutures

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Barack Obama will pick a woman as running mate.

© NewsFutures

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Explainer On Prediction Markets

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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.

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The New Republic

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Some British betting bloggers are completely out of the loop.

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UPDATE: Andrew Sullivan on Hillary Clinton’s exit statement. (He liked it.)

UPDATE: InTrade forum thread.

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InTrade

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Democratic Vice President Nominee

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Republican Vice President Nominee

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BetFair

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Next Vice President:

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Democratic Ticket

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Democratic Vice President Nominee

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Republican Vice President Nominee

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NewsFutures

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Barack Obama will pick a woman as running mate.

© NewsFutures

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Explainer On Prediction Markets

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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.

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[...] Surely she, the most polarizing Democrat, is not the only Democrat who can help Obama appeal to the voters who rejected him in Kentucky and West Virginia. And as his running mate, she would nullify his narrative. The candidate embracing the “future” should not glue himself to Washington circa 1993. Someone promising to “turn the page” should not revert to an earlier chapter. Someone whose mantra is “change” should not embrace her theme of restoration — that the 1990s were paradise and Democrats promise paradise regained.

She, whose experiences as First Spouse have not impressed Obama as acquisitions of national security expertise, would not help him deflect McCain’s predictable attack on his thin curriculum vitae. And the more she seems to be pushing Obama to choose her, the more resolutely he must resist. Otherwise, at the beginning of a contest in which McCain will portray him as a flimsy figure, Obama will define himself as someone who can be pushed around. [...]

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Some British betting bloggers are out of the loop.

See my previous story for more on all that.

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InTrade

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Democratic Vice President Nominee

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Republican Vice President Nominee

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BetFair

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Next Vice President:

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Democratic Ticket

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Democratic Vice President Nominee

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Republican Vice President Nominee

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NewsFutures

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Barack Obama will pick a woman as running mate.

© NewsFutures

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Explainer On Prediction Markets

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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.

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Betting & Information

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#1. Don’t trade on the VP predictions markets.

I have stong reservations about those VP prediction markets. Only 2 men in the world know what is going to happen: Barack Obama, and John McCain.

You can’t divine their final thoughts.

Politicians often lie about their intentions —they also change mind, frequently.

The decision to name one VP nominee could be made in secret —without any early warnings.

Surprise is a card that Barack Obama and John McCain could play. Don’t bet against their final will.

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#2. Don’t believe in “vice presidential selection committees”.

Last time, in 2000, a man named Dick Cheney was appointed to head George W. Bush’s vice presidential selection committee.

He was supposed to scout around to find and assess good candidates.

Surprise, surprise, that fake committee ended up putting Dick Cheney on the Republican ticket —and the rest is history (Iraq war, etc.).

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#3. Don’t bet on Hillary Clinton as VP.

She does not have the slightest chance.

It’s highly unlikely that Barack Obama selects her on the Democratic ticket.

Hillary Clinton as VP nominee (and as VP) would present many quasi insurmountable problems.

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#4. Don’t listen to betting bloggers who tell you that Hillary Clinton has a chance to be on the Democratic ticket.

They are clueless.

Don’t read clueless people. They are a waste of time.

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#5. Select well your primary, advanced indicators.

1. Go to the sources of information. Discard filters. Your insatiable curiosity should drive your search for information.
2. Use technology to select the best news articles out there. Bookmark Memeorandum for US politics (and TechMeme for information technology) —they use bloggers’ links to select what’s hot, a bit like Google’s PageRank does.
3. Use the crowd to sense what’s hot or to discover marginally interesting tidbits. I have 56 friends on Google Reader who share their best items with me. I got many interesting stories that way, every day, from sources I would have never known about, otherwise. (Plus, I receive many e-mails each day from potential sources.)

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#6. Choose your bets (and trades) carefully.

Just because an event derivative is cheap doesn’t mean that it’s a good bet.

Don’t pluck down money on a bet unless you’ve seriously researched the topic by yourself —and possesses some expertise or experience in that field.

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FOLLOW-UP POST: 2 days after my ringing the alarm bell… THE FREE FALL

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InTrade

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Democratic Vice President Nominee

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Republican Vice President Nominee

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BetFair

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Next Vice President:

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Democratic Ticket

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Democratic Vice President Nominee

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Republican Vice President Nominee

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NewsFutures

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Barack Obama will pick a woman as running mate.

© NewsFutures

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Explainer On Prediction Markets

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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.

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Take that, Mike R.

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Reminder: I have stong reservations about those VP prediction markets. (But Bo compels me to publish about them anyway. )

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InTrade

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Democratic Vice President Nominee

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Republican Vice President Nominee

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BetFair

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Next Vice President:

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Democratic Ticket

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Democratic Vice President Nominee

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Republican Vice President Nominee

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NewsFutures

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Barack Obama will pick a woman as running mate.

© NewsFutures

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Explainer On Prediction Markets

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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.

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- To be kept updated on the prediction markets, go to the frontpage of Midas Oracle, or click on the InTrade tag.

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Here are the expired contracts about the Democratic vice presidential nominee (Joe Biden).

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Here is the expired contract about the Repuiblican vice presidential nominee (Sarah Palin).

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ORIGINAL POST:

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Unlike Bo Cowgill, I have stong reservations about those VP prediction markets. Read this WSJ post, for more.

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InTrade

-

Democratic Vice President Nominee

-

Republican Vice President Nominee

-

BetFair

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Next Vice President:

-

Democratic Vice President Nominee

-

Republican Vice President Nominee

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NewsFutures

-

Barack Obama will pick a woman as running mate.

© NewsFutures

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-

Explainer On Prediction Markets

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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.

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Okay, Okay, Okay.

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InTrade

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Democratic Vice President Nominee

-

Republican Vice President Nominee

-

BetFair

-

Next Vice President:

-

Democratic Vice President Nominee

-

Republican Vice President Nominee

-

NewsFutures

-

Barack Obama will pick a woman as running mate.

© NewsFutures

-
-

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.

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