InTrades prediction markets on secretive events are just an Irish scam. – [ANALYSIS]

Paul Hewitt:

How do we know the Intrade price was not accurate? Well, the raid wasn’t just executed on a whim. It had been planned for quite some time. Therefore, the true likelihood must have been much higher than the four or five percent chance the market was telling us.

Many people knew of the plans, albeit they were very high ranking, sworn-to-secrecy types. Since the market did not reflect the potential success of the planned raid, either the market was inefficient or the market, in an aggregate sense, did not possess enough information to make a reasonably informed prediction. In this case, I have to believe the market participants (every last one of them) knew next to nothing about the outcome being predicted.

The Intrade market prediction was nothing more than an aggregation of guesses. This is very different from an accurate prediction (based on calibration) that turns out to be wrong.

Markets such as these have no use, whatsoever, in decision-making. The useful information was that gathered by the SEALs and other secret services, and that was the information provided to the real decision-maker, The President. I would argue that these types of markets have no place as betting markets either. There is no way to test the calibration, so we don’t know whether they are “fair” markets (unlike the accurate calibration of horse races and casino games).

In other words, stop wasting our time operating and analyzing these markets. They are never going to be useful.

InTrade on the elimination of Osama Bin Laden – [ANALYSIS]

Mike Giberson:

How do we know, now, that Intrade&#8217-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 &#8220-100 percent&#8221- heads (and not half-heads and half-tails)?

I&#8217-m not buying Chris&#8217-s implied definition of success and failure.

However, one might ask Robin Hanson about what the Intrade market&#8217-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&#8217-t have a probabilistic approach of InTrade&#8217-s predictions. That&#8217-s the big misunderstanding, which is one part of the big fail of the prediction markets.

InTrade was not able to predict the elimination of Osama Bin Laden. – [PREDICTION POST-MORTEM]

I already blogged about the big fail of the prediction markets. Here&#8217-s more from the NYT, Eddy Elfenbein, and Barry Ritholtz.

John McCains grumpy old pal writes to Bo Cowgills boss.

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Joe Lieberman:

May 19, 2008

Dr. Eric Schmidt
Chairman of the Board and Chief Executive Officer
Google, Inc.

1600 Amphitheatre Parkway
Mountain View, CA 94043

Dear Dr. Schmidt:

YouTube is being used to share videos produced by al-Qaeda and other Islamist terrorist groups. The purpose of this letter is to request that Google implement its own policy against this offensive material, remove these videos from YouTube, and prevent them from reappearing.

Today, Islamist terrorist organizations rely extensively on the Internet to attract supporters and advance their cause. The framework for much of this Internet campaign is described in a bipartisan staff report released last week by the Senate Committee on Homeland Security and Governmental Affairs (“Committee”), which I am privileged to chair, titled Violent Islamist Extremism, the Internet, and the Homegrown Terrorist Threat. The report explains, in part, how al-Qaeda created and manages a multi-tiered online media operation that produces content intended to enlist followers in countries all over the world, including the United States. Central to this media campaign is the branding of content with an icon or logo to guarantee authenticity that the content was produced by al-Qaeda or allied organizations like al-Qaeda in Iraq, Ansar al-Islam (a.k.a Ansar al-Sunnah) or al-Qaeda in the Land of the Islamic Maghreb. All of these groups have been designated Foreign Terrorist Organizations (FTO) by the Department of State.

Searches on YouTube return dozens of videos branded with an icon or logo identifying the videos as the work of one of these Islamist terrorist organizations. A great majority of these videos document horrific attacks on American soldiers in Iraq or Afghanistan. Others provide weapons training, speeches by al-Qaeda leadership, and general material intended to radicalize potential recruits.

In other words, Islamist terrorist organizations use YouTube to disseminate their propaganda, enlist followers, and provide weapons training – activities that are all essential to terrorist activity. According to testimony received by our Committee, the online content produced by al-Qaeda and other Islamist terrorist organizations can play a significant role in the process of radicalization, the end point of which is the planning and execution of a terrorist attack. YouTube also, unwittingly, permits Islamist terrorist groups to maintain an active, pervasive, and amplified voice, despite military setbacks or successful operations by the law enforcement and intelligence communities.

YouTube posts “community guidelines” for users to follow, but it does not appear that the company is enforcing these guidelines to the extent they would apply to this content. For example, the community guidelines state that “[g]raphic or gratuitous violence is not allowed. If your video shows someone getting hurt, attacked, or humiliated, don’t post it.” Many of the videos produced by one of the production arms of al-Qaeda show attacks on U.S. forces in which American soldiers are injured and, in some cases, killed. Nevertheless, those videos remain available for viewing on YouTube. At the same time, the guidelines do not prohibit the posting of content that can be readily identified as produced by al-Qaeda or another FTO.

I ask you, therefore, to immediately remove content produced by Islamist terrorist organizations from YouTube. This should be a straightforward task since so many of the Islamist terrorist organizations brand their material with logos or icons identifying their provenance. In addition, please explain what changes Google plans to make to the YouTube community guidelines to address violent extremist material and how Google plans to enforce those guidelines to prevent the content from reappearing.

Protecting our citizens from terrorist attacks is a top priority for our government. The private sector can help us do that. By taking action to curtail the use of YouTube to disseminate the goals and methods of those who wish to kill innocent civilians, Google will make a singularly important contribution to this important national effort.

Thank you for your immediate attention to this critical matter and I look forward to your response.

Sincerely,

Joseph I. Lieberman (ID-CT)
Chairman, Senate Committee on Homeland Security and Governmental Affairs