For example, suppose a policymaker seeks a forecast of the likelihood of an avian flu outbreak in 2008. [He/she] may float a security paying $1 if and only if an outbreak actually occurs in 2008, hoping to attract traders willing to speculate on the outcome.
As I wrote yesterday (much to the despair of mister Bo Cowgill ), if nobody trades on your socially relevant prediction market, then it won’-t elicit any forecast. Goal #1 is thus to satisfy the traders, not the final users of the price info —-in this case, allegedly, the “-policy makers”- (as if only the politicians were interested in crucial information!!).
I’-m all for the socially relevant prediction markets, but they are not a special category of prediction markets (and thus don’-t deserve a special terminology). As with everything in business, the marketing approach is the cornerstone.
Don’-t expect to hear the words “-marketing”- and “-BetFair”- (the most successful commercial prediction exchange) at the second workshop on prediction markets, in San Diego, CA, in June 2007.
Ivory Tower, you said?
Bird flu (H5N1) to be confirmed in the USA ON/BEFORE 31st Mar 2007
Avian flu will reach the EU before the US
Mind the traders, and the market-generated forecasts will come as a by-product.