I don’t think there is any question that the usefulness of prediction markets has been exaggerated. We don’t hear much from James Surowiecki anymore. So a few of those polled probably indicated that he doesn’t exaggerate the usefulness (at least not anymore). Justin Wolfers isn’t as well known as Robin Hanson in the prediction market arena. This probably accounts for the large size of the “Don’t Know” vote. This leaves the “Yes” category, which would be made up of Robin Hansonites, who believe the slightest possible improvement in predictive accuracy over other methods justifies a significant investment in prediction markets.

If the question had been asked in a prediction market instead of in a poll, such answers would have led us to believe that the market knows little about the subject, if anything at all. Of course it would have been difficult, if not impossible, to create a prediction market in which the “outcome” is an opinion!

-

UPDATE: Here’s an example (among many) of the grave problems with prediction markets, which are unreported by the media.

-

PDF document.

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

ABC News video.

ABC News article.

NYT.

Robin Hanson:

I can confirm that this disinterest is real. For example, when I try to sell firms on internal prediction markets wherein employees forecast things like sales and project completion dates, such firms usually don’t doubt my claims that such forecasts are cheap and more accurate. Nevertheless, they usually aren’t interested.

The other take about forecast accuracy.

UPDATE: The poll result.

Robin Hanson’s insistence is absurd.

Video streaming by Ustream

How do we know, now, that Intrade’s market price was not an accurate estimate of the probability bin Laden was killed or captured by September 2011? Is an prior estimate of 50 percent likelihood that a tossed coin will come up heads wrong if the coin comes up as “100 percent” heads (and not half-heads and half-tails)?

I’m not buying Chris’s implied definition of success and failure.

However, one might ask Robin Hanson about what the Intrade market’s performance implies about the usefulness of his Policy Analysis Market idea.

Note that I was contrasting the InTrade-Bin-Laden failure with the high expectations set by Robin Hanson, Justin Wolfers and James Surowiecki.

Also, other than statisticians, most people don’t have a probabilistic approach of InTrade’s predictions. That’s the big misunderstanding, which is one part of the big fail of the prediction markets.

By 1/1/91 a <1 liter device will have generated over 1 watt of power output more than input from room-T fusion, including amortized power to create/separate components.

I suppose that InTrade will be willing to float E-cat contracts. We’ll see.

- Robin Hanson and his wife maintains 2 separate bank accounts, and his wife is down to Earth.

Marriage, despite its lack of clean edges and predictable outcomes, is one of the few institutions he seems to have no interest in reforming.

- Justin Wolfers’s money is managed by his wife.