American Health CAre Presentation

I watched part of the U.S. Health Care Reform bill passage on Sunday, March 21, 2010. Combined with the political commentary, it was pretty clear that there is a lot of misinformation. A particularly extreme right-wing viewpoint (along with moronic comments), can be found at the Cafe Hayek blog. I’ll warn you, before you click on the link (if you really have to), that most of the comments are remarkably irrational. Don’t even think of trying to debate with these oddballs (I’m being charitable).

For a much more balanced and logical explanation of the American Health Care Reform, click here for an excellent (and easy to understand) PowerPoint presentation. This is an award winning presentation by Dan Roam and C. Anthony Jones, M.D. Enjoy!

[Cross-posted from the Toronto Prediction Market Blog]

2:15 into

Download this post to watch the video —if your feed reader does not show it to you.

Via Joe Weisenthal

Bye bye UIGEA.

-

The Forrester executive summary:

The “wisdom of crowds” is capturing the attention of corporate strategists across the globe, and, as a result, many are now looking to prediction markets — speculative markets in which traders collectively predict future events — to generate collective intelligence. For enterprises, prediction markets bring unique value: They focus on the future, aggregate diverse information pools that can be applied to multiple decision-making domains, create streams of actionable data suitable for executive decision-making, and can often cut through corporate politics and pressures at lower cost than traditional forecasting methods. Market researchers will, however, need to have an active hand in the management of these mechanisms, ensuring strong management support, the right incentives for traders, and a focus on appropriate questions. When executed properly, the value to the enterprise is enormous; as a result, Forrester believes that prediction markets will ultimately find a permanent home in the market research toolbox.

-

For information on hard-copy or electronic reprints, please contact the Client Resource Center at +1 866.367.7378, +1 617.617.5730, or resourcecenter –at– forrester –dot– com. We offer quantity discounts and special pricing for academic and nonprofit institutions.

-

-

-

-

APPENDIX #1: Prediction Markets – DRM Review

-

APPENDIX #2:

-

Here is a list of companies that provide software for prediction markets:

-

Inkling Markets – (MSR + AMM)

NewsFutures – (CDA + optional AMM + SR)

Xpree – (MSR + AMM)

Zocalo – (CDA + MSR + AMM) – (open-source)

Nosco – (CDA + MSR + AMM)

QMarkets – (MSR + AMM)

Ask Markets – (MSR + AMM)

Exago Markets – (CDA + optional AMM)

Gexid – (?)

ProKons – (?)

Spigit – (?)

HSX Virtual Markets – (Virtual Specialist + AMM)

HubDub – (MSR + AMM) – (not licensed)

Yahoo!‘s Prediction Exchange – (MSR + AMM + DPMM) – (not licensed)

Google‘s Prediction Exchange – (CDA) – (not licensed)

MicroSoft PredictionPoint – (MSR + AMM) – (not licensed)

InTrade – (CDA + AMM for play money) – (not licensed)

TradeSports – (CDA + AMM for play money) – (not licensed)

Iowa Electronic Markets – (CDA) – (not licensed)

HedgeStreet – (CDA) – (not licensed)

TradeFair – (CDA) – (not licensed)

BetFair – (CDA) – (not licensed)

Trading Technologies International – (CDA) – (not for event derivatives)

-

Here’s a list of prediction market consultants:

-

Robin Hanson – (George Mason University, Virginia, U.S.A.)

• Robin Hanson does prediction market consulting work, and have no exclusive arrangements.
• “I’m more interested in helping groups that want to add lots of value to big decisions, versus groups that just want to dabble in a new fad.”

Inkling – URL: Inkling Markets – (Chicago, Illinois, U.S.A.)

• Adam Siegel
• Nathan Kontny

NewsFutures – (Maryland, U.S.A. & Paris, France, E.U.)

• Emile Servan-Schreiber — Post Archive at Midas Oracle
• Maurice Balick

Xpree – (California, U.S.A.)

• Mat Fogarty

Chris Hibbert – (California, U.S.A.)

• Chris Hibbert (Software architect / Zocalo project manager) — Post Archive at Midas Oracle
• Chris Hibbert’s personal website — Chris Hibbert’s personal blog —
• Chris Hibbert’s CommerceNet profile — (His stint there ended in mid 2006.)

Justin Wolfers – (University of Pennsylvania’s Wharton Business School, Pennsylvania, U.S.A.)

• Justin Wolfers takes on prediction market consulting work.
• The prediction market industry is “a case where the interaction between firm practice and academic research are reasonably close.”

Koleman Strumpf – (University of Kansas, Kansas, U.S.A.)

• Koleman Strumpf — Post Archive at Midas Oracle
• Koleman Strumpf can be approached to consult on prediction market projects.
• “Prediction markets help harness the knowledge of diverse groups. They have great potential as a tool for industry.”

Nosco – (Danemark, E.U.)

• Jesper Krogstrup
• Oliver Bernhard Pedersen

Qmarkets – (Israel)

• Noam Danon

Ask Markets – (Greece, E.U.)

• George Tziralis — Post Archive at Midas Oracle

HP Services & HP Labs – (U.S.A.)

• Predicting the future –with games — Introductory article
• Information Dynamics Lab — Internal prediction markets
• BRAIN – (Behaviorallly Robust Aggregation of Information in Networks) — Scoring Rules (i.e., non-trading technique)
• Bernardo A. Huberman – Bernardo Huberman – Senior Fellow & Director
• Kay-Yut Chen -
• Google Search for “prediction markets”

Hollywood Stock Exchange (HSX) & HSX Research – (L.A., California, U.S.A.)

• Prediction market consultancy firm
• Movie business

IntelliMarket Systems – (L.A., California, U.S.A.)

• Charles R. Plott – Charles Plott – (CalTech Inst., California, U.S.A.)

Gexid – Global Exchange for Information Derivatives – (Germany, E.U.)

• Bernd Ankenbrand — Post Archive at Midas Oracle

ProKons – (Germany, E.U.)

• Peter Gollowitsch

Exago Markets – (Portugal, E.U.)

• Pedro Da Cunha

NimaniX – (Israel)

• Elad Amir (CEO), Littal Shemer Haim (VP Business development), David Shahar (VP R&D)

Michael Giberson – (Texas, U.S.A.)

• Michael Giberson (Energy Economist – Center for Energy Commerce, Rawls College of Business, Texas Tech University) — Post archive at Midas Oracle
• Knowledge Problem – Blog on economics, energy policy, more.

Other Consulting Firms

McKinsey – (U.S.A.)

• Google Search for “prediction markets”
• The Promise Of Prediction Markets – by McKinsey – 2008-04-XX

Accenture – (U.S.A.)

• Google Search for “prediction markets”

Gartner – (U.S.A.)

• Google Search for “prediction markets”

Forrester – (U.S.A.)

• Google Search for “prediction markets”
• Prediction Markets: Wisdom Of The Crowd Comes To The Enterprise. – 2008-07-14

The Boston Consulting Group – (U.S.A.)

• Google Search for “prediction markets”

CapGemini – (U.S.A.)

• Google Search for “prediction markets”

KPMG – (U.S.A.)

• Google Search for “prediction markets”

Price Waterhouse Cooper – (U.S.A.)

• Google Search for “prediction markets”

Ernst & Young – (U.S.A.)

• Google Search for “prediction markets”

Deloitte – (U.S.A.)

• Google Search for “prediction markets”

IBM – (U.S.A.)

• Google Search for “prediction markets”

EDS – (U.S.A.)

• Google Search for “prediction markets”

-

RELATED: A news article (in French) implies, between the lines, that BetFair (who always respected the US laws) should be later granted a license to operate in the US, the day it becomes legal, while InTrade-TradeSports (who didn’t) should not be granted a license. Hummm…

EXTERNAL LINK: iMEGA

THANKS: Tip via mister Emile of NewsFutures

We’ve just released our 2008 Presidential Election Map. The map is based on markets for all 50 states. In addition to the page there is a map widget (displayed above). The widget goes into feed readers and also dynamically updates on a page refresh. Click on the widget above to access the code snippet.

It has been a dramatic week for the election markets with Obama surging back from around 50% to the low 60′s. The Hubdub market has generally kept in line with the UK bookmaker and betting exchange odds. Roll on the debates!

-

Gary Becker:

[...] I believe that online political prediction markets, and other online prediction markets as well, should be legal in the United States and elsewhere, even if the amounts bet were quite large. There is no important substantive difference between such online betting markets and the Chicago Mercantile Exchange and other exchanges that allow individuals and organizations to take positions on movements of stock indexes, housing price indexes, and prices of other derivatives. A distinction is sometimes made between political betting markets and derivative markets since participants in derivative markets may be hedging other risks that they face. Yet this distinction has little substance since if larger bets were allowed in online political markets, groups whose welfare depended greatly on political outcomes would make greater use of these markets. For example, if a Republican presidential win would mean greater spending on military weapons, companies in the arms business might hedge their risks by betting on Barack Obama.

If large bets were allowed, some wealthy groups may bet a lot on their candidates in order to exert bandwagon influences on public opinion through their large bets affecting market odds. If so, these markets likely would become less reliable as predictors of outcomes, and hence would have less influence on opinions. To a large extent, therefore, these markets would be self correcting, although online political markets might place various other restrictions on bets, as is common in derivative and other exchanges.

-

Richard Posner:

[...] There is an interesting question whether prediction markets should be thought of as “gambling” and perhaps prohibited. As a matter of policy, that would be a mistake, even if one thinks that gambling should be prohibited. The prediction markets are markets for speculation, rather than for game-playing or risk-taking. Slot machines, card-playing, roulette wheels, and other conventional forms of gambling do not generate socially valuable information. Speculation does. Commercial speculation serves to hedge commercial risks and bring prices into closer phase with value. Political, cultural, etc. prediction markets also yield socially valuable information. The outcome of elections is important to companies and even individuals for whom particular public policies are important; they may wish to make adjustments to avert or exploit looming political change. Politicians too need to have as sharp a sense as possible about the effects on the electorate of their and their opponents’ strategies. Apparently they can get more accurate information from the prediction markets than from the public opinion pollsters.

-

Felix Salmon’s rebuttal.

-

The major question here is what degree of trading restrictions the CFTC considers appropriate in order to fulfill the CEA’s “beyond the control” criterion of excluded commodities. There is little doubt that low position limits alongside candidate death contingencies and prohibitions on trading by candidates, their staffs, members of the electoral college, and their proxies would not satisfy the CEA in this respect. The challenge lies in enforcing such trading prohibitions. I hope that Hedgestreet is in the process of developing a framework to do so. The CFTC could also issue an interpretive letter on this specific point, without addressing the more general, challenging issues related to their jurisdiction over event markets.

If Hedgestreet’s trading restrictions are conservative and rigorous, it is improbable that such a self-certification would put Hedgestreet in bad graces with the CFTC. Alternatively, Hedgestreet could submit the futures (or options) for approval under CFTC regulation 40.3. If they do so, the CFTC has 45 days to review the products, at which point they could render a decision or extend the review process. In the meantime, however, Hedgestreet could be in communication with the CFTC and NFA concerning the development of trading restrictions, which again should be the main point of contention here, as there is no doubt that such event markets are associated with an “economic consequence”. Note that CME does not even believe that trading prohibitions are necessary, citing the role of the Fed in determining interest rates and the lack of problems there with respect to manipulation. I tend to believe that the Fed and interest rates is a special case, not to mention that it is treated differently in the CEA, and that it is prudent to impose special trading restrictions on political event contracts. Those restrictions, however, can remain flexible and be loosened over time, especially the position limits, as the market grows.

Given the current political climate in which the CFTC operates, the Commission may welcome such an active stance from Hedgestreet and other DCMs on this issue, as it will allow them to take a more passive role in the process. In the case of vote-share, electoral college and tax futures with appropriate trading restrictions, the Commission would simply be complying with the CEA by allowing such contracts. Allowing winner-take-all options would be incrementally more sensitive for the CFTC given their additional discretion in such cases. In any case, I think we have passed beyond the point where there is any material doubt that such markets are bona fide excluded commodities.

[Previously, my response to the CFTC, where I take a broader view with respect to jurisdiction and issues like gaming law preemption. Cross-posted from Risk Markets and Politics]