Midas Oracle .ORG » state polls

A graph with a data point for each state, with the horizontal axis representing the polling data and the vertical axis representing the Intrade contract price

Chris F. Masse — Mon, 05 Jan 2009 07:39:50 +0000

Via Andrew Gelman

On November 3, 2008:

“Still, as noted, it was a good election for [the] prediction markets and another piece of evidence of their superiority over the pundit[s] (and at least parity with the poll).”

Chris F. Masse — Tue, 25 Nov 2008 16:39:31 +0000

Dixit Nigel Eccles in a comment.

at least parity with the poll

I agree with the above.

their superiority over the pundits

What documented evidence do you have about that, mister the cocky entrepreneurial Scotsman?

John Tierney linked to that Huffington Post that listed the pundits’ predictions about the total number of electoral votes that each presidential candidate would take. But I disagree with that way of predicting the electoral college and assessing these predictions. With this completely flawed method, if you are damn wrong on a state and damn wrong (in the opposite way) about another state that has the exact same number of electoral votes, then you are a bright genius worth the Nobel prize of forecasting. Gimme a break. Enough with that voodoo way of assessing predictions about the electoral college. Do the assessment state by state.

InTrade and HubDub got lucky that their 2 mistakes (so to speak, in a non-probabilistic way) on Missouri and Indiana (both with 11 electoral votes) canceled themselves perfectly. IT WAS PURE LUCK. If their 2 mistakes had been made in the same direction (say, betting on Obama with the outcome going eventually to McCain), and/or their 2 mistakes had been done on 2 very dissimilar states (say, one with 6 electoral votes and the other one with 27 electoral votes), then we would have had reporters and bloggers bashing the prediction markets for the whole month of November.

The 2 links you should follow, first thing, this Monday morning

Chris F. Masse — Mon, 17 Nov 2008 09:37:36 +0000

- A portrait of Nate Silver in the New York Times.

- Jed Christiansen’s post-mortem on the 2008 US presidential elections.

I’ll have many remarks to add to his analysis.

Is Iowa Electronic Markets’ George Neumann really a gentleman?

Chris F. Masse — Sat, 15 Nov 2008 20:48:35 +0000

George Neumann is ducking the objections that was put under his very nose.

Bad.

It wasn’t about the predictions.

Jason Ruspini — Sat, 15 Nov 2008 18:49:16 +0000

Let’s not confuse media visibility with utility. Aside from the depressed Obama-to-win prices on one exchange, prediction market and polling aggregation results for the 2008 election were essentially the same using squared errors. Despite his insane schematics, Emile Servan-Schreiber has a good point about capturing the interest of the public, something that nerdy academic and libertarian-types aren’t necessarily good at. An Obama-backing baseball statistician out of Daily Kos nailed that part this year, a year where people were especially skeptical of markets, not to mention unregulated “offshore” ones. Likewise, if you put down the lens of considering markets as commission generators, you’ll see the value of contracts tied to social and cultural outcomes. Of one the biggest assets of prediction exchanges is media goodwill, which should be fostered by distilling information on subjects like global development and art prices.

Other things to keep in mind:

This year happened to have a lot of favorite-longshot States, which turned-out to be favorable to 538′s error relative to markets.
Prediction markets register information in real time. Since the difference in error is small, this is important.
Markets are more flexible, and useful in situations where you don’t have a rich data set and obvious statistical analyses. Elections are just one type of question. Even if you have data, it might be less expensive to set up a new contract than to undertake the analysis.
And of course, prediction markets have functions aside from forecasting, and provide incentives for uncovering new information.

3 links you can’t afford to miss

Chris F. Masse — Fri, 14 Nov 2008 18:29:22 +0000

- How Companies Are Using IT To Spot Innovative Ideas – (3 pages) – by Information Week’s David Greenfield – 2008-11-10

- An interview with InTrade’s Chad Rigetti and John Delaney – 2008-11-xx — Much smarter than the idiotic interview Chad Rigetti gave some time ago.

- Almost all final state polls were within the margin of error. Even the average of the national polls was spot on. - 2008-11-12

“Long after Intrade gave a 99% chance for an Obama victory, CNN announced him as the winner, predictably at 11pm EST on-the-dot.”

Chris F. Masse — Wed, 12 Nov 2008 18:28:20 +0000

Because CNN wanted a 100% certainty, Jason.

You are mixing up oranges and bananas, here.

2008 US presidential elections

Chris F. Masse — Fri, 07 Nov 2008 09:13:46 +0000

- InTrade versus Nate Silver

- The New York Times’s analysis on the (almost) final results.

UPDATE: Electoral-Vote.com on their accuracy.

Nate Silver “killed” InTrade.

Chris F. Masse — Thu, 06 Nov 2008 10:42:25 +0000

The 2008 US presidential election was “pretty close”, and Nate Silver’s state poll aggregation “pretty much nailed” it.

Chris F. Masse — Wed, 05 Nov 2008 20:27:56 +0000

The pretty good Andrew Gelman:

This is a (not yet expired) static chart from InTrade on whether the RCP poll aggregation have been accurate: