InTrade CEO John Delaney:
Our #1 untapped resource is the vast collective intellect that we have only started to use. Harnessing the “-wisdom of the crowd”- has a very big potential role in improving all of our lives. If we do it, we all have a voice and will feel part of the solution as well as the problem. We can solve some wicked problems, like climate, resource, growth, social, and economic challenges. In simple terms, there exists between us the best information on how we solve our key challenges. If our leader’s embrace and permission new systems like prediction markets to operate in a transparent prudent way I am convinced that we can contribute in no small part to the solution.
Recall, that US Department of Defence believed a prediction market could provide valuable information on growth, risks and social issues. Hundreds of academics, dozens of Fortune 500 companies, and millions of people believe that prediction markets can help provide valuable information on economic, financial, social and environmental issues.
I have already expressed my deep skepticism for this kind of grandiose discourse.
Today, if I may, I would like to ask these questions to John Delaney:
- We have just experienced one “-wicked”- problem, recently —-the credit crunch crisis. Can you demonstrate that InTrade was “-part of the solution”-?
- Speaking of the credit crisis, for instance, what makes you think that InTrade can be “-part of the solution”-, whereas it is now documented that the World Economic Forum (a.k.a. Davos), where 2,500 “-global leaders”- gather each year, have failed miserably in raising interest for the speakers who were talking about this (then, looming) financial crisis? Is InTrade really stronger than Davos?
- Would you mind giving us specific instances, taken from the past 12 months, where the InTrade prediction markets were of high social utility to society?
- Can you cite the names of some research scientists who are endorsing the idea that the real-money prediction markets (from either InTrade or BetFair) “-can contribute in no small part to”- the solutions to the world’-s “-wicked problems”-?
- What would you respond to those who say that, during the 2008 US presidential election campaign, the InTrade prediction markets sucked up to Nate Silver?
Here are my thoughts:
- I agree with InTrade CEO John Delaney that prediction markets are interesting, but I disagree when he suggests that they are radical tools —-they are subtitle tools, actually.
- I agree with InTrade CEO John Delaney that prediction markets are (somewhat, I would say) useful to society —-but the demonstration should be done using Robin Hanson’-s guidance.
What Nate Silver predicted:
What InTrade predicted:
I agree with you pretty much completely on this.
Prediction markets are best when forecasting variables that will be known/revealed at a particular time in the future. Many of the important ones already exist and are taken for granted; oil futures, for example. Tryint to say that prediction markets will solve the worlds’ problems is essentially marketing bluster.
What these tools of ours do is try to put numbers on problems that are difficult to assess. Markets are great tools for aggregating information. But they will never deviate from conventional wisdom, they only serve to put a number on the conventional wisdom. They are superior to other tools because the numbers are more accurate when you ask more people in a non-biased way.
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