Yearly Archives: 2008

The best headline of the day -post Michigan

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Ron Paul

From the Los Angeles Times:

Ron Paul, Dr. No-body, beats Rudy and Fred &#8211-again.

Well, he&#8217-s hanging in there. Not only that, but Rep. Ron Paul thumped two reputed Republican heavyweights in the Michigan primary &#8212- former Sen. Fred Thompson of Tennessee and former New York Mayor Rudy Giuliani. [&#8230-]

Take that, Mike Linksvayer and Caveat Bettor. :-D

Read the previous blog posts by Chris. F. Masse:

  • WordPress, you’re simply the best.
  • Swarchy – Unleashing the mass wisdom
  • Prediction markets are rushing to incorporate the latest Nevada polls. [*]
  • The BetFair blog claims a worldwide victory, but does not show its wares.
  • The Future of the Prediction Markets
  • We regret to inform you of the passing of BettingMarket.com.
  • Niall O’Connor, the one-data-point analyst

BitGravity = video distribution network

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No GravatarBitGravity is the IT provider for the official Apple video feed of MacWorld 2008.

Go to its frontpage, and stick there for 3 minutes to watch the awesome animals-in-the-wild video.

Let&#8217-s hope that the videos on prediction markets will reach this high level of quality, one day.

Read the previous blog posts by Chris F. Masse:

  • Prediction Market Journalism
  • TechCrunch is 221 times bigger than Midas Oracle.
  • Earthquake measuring 9.0 or more on Richter scale to occur anywhere on or before December 31, 2008
  • Why Midas Oracle (and not TV news shows or print newspapers) will dominate the future.
  • The Six Degrees Of Separation
  • Alpha Thesis
  • Meet Michael Arrington of TechCrunch.

Prediction Markets vs. Bookmakers – The Ultimate Argument

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No GravatarLas Vegas Sun:

“The bookie’s odds will be influenced by his appetite for risk, the action he’s got on his side and his own bias,” said John Delaney, chief executive officer of Dublin-based Intrade.com, the world’s largest prediction market. “If I were to ask you where you would find the expected value of IBM, would you ask a broker or go to the stock exchange? The aggregation of information that happens on an exchange typically provides better information than if you had several buyers and just one seller.”

Excellent.

Read the previous blog posts by Chris F. Masse:

  • BetFair-TradeFair (slightly) improve their blog, finally (it was about time) —and open 2 new sections: “prediction markets” and “financials”.
  • Control in Distributed Networks (Decisions 2.0: Distributed Decision-making)
  • What are enterprise prediction markets for?
  • BetFair sponsor medical doctor for jockeys.
  • Freakonomics @ Predictify
  • MyPronostic
  • Can you correctly forecast sales of music CDs?

The Michigan primary as seen thru the prism of the InTrade prediction markets

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Michigan, U.S.A. &#8212- Tuesday, January 15, 2008

&#8212-

The Democrats

The Hillary Clinton event derivative was expired to 100.

MI Dem Clinton

MI Dem Obama

MI Dem Edwards

MI Dem Field

&#8212-

The Republicans

The Mitt Romney event derivative was expired to 100.

MI Rep Romney

MI Rep McCain

MI Rep Giuliani

MI Rep Field

Source: InTrade

The pictures of NewsFutures Emile Servan-Schreiber in Hong Kong, China

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No, no, no&#8230- &#8212-not that:

Bruce Lee

That, rather:

EJSS

NewsFutures – NewsFutures blog

Read the previous blog posts by Chris. F. Masse:

  • We regret to inform you of the passing of BettingMarket.com.
  • Niall O’Connor, the one-data-point analyst
  • The best headline of the day –post Michigan
  • Enterprise prediction markets will be the next big thing when… hierarchies are flat.
  • Prediction Markets vs. Bookmakers — The Ultimate Argument
  • The Michigan primary as seen thru the prism of the InTrade prediction markets
  • BitGravity = video distribution network

Enterprise prediction markets will be the next big thing when…

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Tom Davenport:

  • Confidence that executives have valuable roles to play even if they don’t always have the right answer-
  • A high level of trust in the intelligence and capabilities of employees-
  • The willingness to follow numbers and analysis wherever they lead (as long as they are more-or-less consistent with common sense)-
  • A pretty strong analytical and financial orientation (since futures markets aren’t something that every Joe or Jane understands).

Read the previous blog posts by Chris. F. Masse:

  • We regret to inform you of the passing of BettingMarket.com.
  • Niall O’Connor, the one-data-point analyst
  • The best headline of the day –post Michigan
  • Enterprise prediction markets will be the next big thing when… hierarchies are flat.
  • Prediction Markets vs. Bookmakers — The Ultimate Argument
  • The Michigan primary as seen thru the prism of the InTrade prediction markets
  • BitGravity = video distribution network

InTrade is no psychic -but what if that bit of truth is systematically said BEFORE, as opposed to AFTER.

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David Leonhart in his New York Times blog, last week:

The political prediction markets just went through their version of the dot-com bubble. […]

Intrade’s odds have had a very good forecasting record over the last few years, having correctly called every Senate race in 2006, every state in the 2004 presidential election and all but one state in the 2004 Senate races. The odds also correctly called New Hampshire for John McCain this week and now make him the favorite for the Republican nomination- he is given a 38 percent chance, while Rudolph W. Giuliani is given a 29 percent chance.

Intrade’s executives, as well as the academic researchers who study the site, are careful to point out that its contracts provide only odds, not certainties. An outcome that’s given a 20 percent chance of happening should happen 20 percent of the time — not never. […]

The question I asked yesterday was: What would happen if that warning label were to be sticked on InTrade before each election, as opposed to after each predictive debacle? My bet is that, if you suppress the mention of InTrade&#8217-s magical touch, the Irish real-money prediction markets will be far less appealing to people. They want magic. All of the sudden, InTrade is not a psychic anymore, but simply a forecasting tool of convenience for busy people who don&#8217-t want to check the polls in details. This issue is crucial if we want to be able to define what is the &#8220-prediction market approach&#8221- &#8212-as opposed to the &#8220-betting exchange approach&#8221-.

Give me one reason why the political analysts should follow the US primaries thru the prism of the InTrade prediction markets instead of thru the polls. [My question is still unanswered, you will notice. Which shows to you the embarrassment of the prediction market luminaries (or so they think they are).]

Once the true nature of the prediction markets appears more clearly, it becomes evident that they are not tools for the experts, but tools for the ignorants, rather. Which is great, provided that this is said clearly from the start.

Why collecting and synthesizing the dispersed available information?

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Sean Park (after a long, boring introduction to the subject):

[…] The ‘failure’ of New Hampshire was the result of primarily two factors:

  1. It wasn’t a failure. No market is always right. More importantly markets reflect the information available to and the interests of their participants. Basically markets are very efficient mechanisms (I would claim the most efficient) for processing information. No more, no less.
  2. In this particular instance, the probability of the market producing an erroneous forecast was high due to the lack of liquidity. This is a problem of all political markets in the US. Show me a market on the New Hampshire primaries with tens of thousands of participants and millions of dollars traded and I will show you a market that creates more valuable information. BUT it would still on occasion be ’surprised.’

Basically I guess what I’m trying to say is the expectations seem to be set all wrong by many inside the community. I think “prediction markets” – creating markets in information and outcomes is a wonderfully important and valuable thing to do. Equally however I think that anyone that represents such markets as being able to predict the future is a charlatan. What they can do is collect and synthesize powerfully and efficiently all the dispersed available information – using money as the relevance filter. This is very valuable in its own right and is defensible. Promoting prediction markets to true sceptics (ie mainstream American politicians) on the basis that they are a Delphic Oracle is surely a path to certain tears and ultimately is almost guaranteed to fail. [*]

Markets don’t compute unknown unknowns. That doesn’t mean they are useless, just that they have to be understood in context.

[*] How to promote the prediction markets, then? As information collecting tools? Who should use these tools, then? Experts or ignorants? Sean Park does not elaborate further. None of the questions I have asked are answered.

HubDub wil redefine the play-money exchange landscape.

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In &#8220-private beta&#8221-.

So I can&#8217-t say anything.

Or, next thing, I&#8217-m a dead blogger.

As soon as you catch this post, RUSH THERE AND TAKE A VIRTUAL TOUR. Awesome. Nigel Eccles is the man. John Delaney, David Jack, Adam Siegel and Emile Servan-Schreiber can return to the locker room. Robin Hanson and Justin Wolfers are history artifacts, starting today. The whole world will look completely different after the HubDub launch.

How come nobody got that idea (news aggregation + prediction exchange) before HubDub???

Have Googles enterprise prediction markets been accurate?

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Justin Wolfers:

So we decided to move beyond asking, “Do prediction markets work?” and instead use them as a tool for better understanding how information flows within a (very cool) corporation.

I am more interested in the accuracy of the enterprise prediction markets than in corporate micro-geography issues.

Related Links: Using Prediction Markets to Track Information Flows: Evidence From Google – (PDF file – PDF file) – by Bo Cowgill (Google economic analyst), Justin Wolfers (University of Pennsylvania) and Eric Zitzewitz (Dartmouth College)