Previously: Part One – Part Two – Part Three
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Cass Sunstein has just been featured in the print edition of NewsWeek.
Web spot.
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A FRIEND OF THE PREDICTION MARKETS IN THE WHITE HOUSE – Part 4
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Monthly Archives: January 2009
The Oracle, with Max Keiser – BBC World News
The Oracle (“-a satirical look into the future”-), with Max Keiser, on BBC World News.
I have just watched the first edition of this TV show.
- There is no mention of collective intelligence and prediction markets, alas.
- The format of the show is very well thought out. It is a winner. There is an intro with videos or charts, some cheap talks with the guests, and then “-The Oracle”- (a semi sphere at the center of the TV studio) beams out wildly and delivers a prediction, which the guests are invited to comment on.
- Max Keiser is almost awesome and Stacy Herbert (the co-host) is authoritative enough.
- It is infotainment —-think of Max Keiser as the Michael Moore of Wall Street.
- It is leftist —-that, you already knew.
- It is funny. The segment where Max Keiser impersonates Colin Powell at the United Nations is hilarious —-in the new UN speech, Saddam Hussein is replaced by the bankers, and the WMDs are the financial derivatives. A must see.
- The guests for the first edition were Jacques Attali, who is a French fraud (along with Bernard-Henri Levy and Alain Minc) in my view, and a British actress known only to her family and friends. They were not stellar, but good enough.
- Next week, Nigel Eccles of HubDub will be a guest, I have been told.
- Max Keiser has a future in the televised infotainment industry.
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UPDATE: Episode One
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The Oracle, with Max Keiser
Episode One
Download this post if you don’-t see the embedded video.
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A FRIEND OF THE PREDICTION MARKETS IN THE WHITE HOUSE
Under the Barack Obama administration, Cass Sunstein will head the Office of Information and Regulatory Affairs, within the Office of Management and Budget, which is part of the Executive Office of the President of the United States.
Here’-s Cass Sunstein’-s track record on prediction markets:
– Infotopia: How Many Minds Produce Knowledge (Oxford University Press 2006)…- which featured prediction markets and collective intelligence. – (podcast)
– Deliberating groups versus prediction markets – (paper)
– A blog post defending the prediction markets after the New Hampshire upset.
– Cass Sunstein so-signed the 2008 petition on prediction markets.
UPDATE:
– Chicago Tribune
– WashPost
– Wall Street Journal
Although obscure, the post wields outsize power. It oversees regulations throughout the government, from the Environmental Protection Agency to the Occupational Safety and Health Administration. Obama aides have said the job will be crucial as the new administration overhauls financial-services regulations, attempts to pass universal health care and tries to forge a new approach to controlling emissions of greenhouse gases.
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UPDATE: PodCast on behaviorial economics
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UPDATE: Cass Sunstein and Bo Cowgill – PDF file
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NEXT: Part Three
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A FRIEND OF THE PREDICTION MARKETS IN THE WHITE HOUSE – Part 2
Previously: Part One
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Wall Street Journal:
Although obscure, the post wields outsize power. It oversees regulations throughout the government, from the Environmental Protection Agency to the Occupational Safety and Health Administration. Obama aides have said the job will be crucial as the new administration overhauls financial-services regulations, attempts to pass universal health care and tries to forge a new approach to controlling emissions of greenhouse gases.
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NEXT: Part Three
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Are they afraid?
Bo Cowgill and Midas Oracle are the only media to have published about the Lee–-Moretti paper. We are awaiting insightful takes from the following prediction market bloggers:
– Freakonomics @ New York Times
– Overcoming Bias – (”-the future of humanity”-)
– Odd Head
– Computational Complexity
– Caveat Bettor
– Mike Linksvayer Blog
– NewsFutures Blog
– Inkling Markets Blog
– Consensus Point Blog
– Xpree Blog
– George Tziralis Blog
– Chris Hibbert Blog
– Jason Ruspini Blog
– John Delaney Blog
– James Surowiecki Blog @ New Yorker
– Felix Salmon @ Portfolio – Market Movers
– Zubin Jelveh @ Portfolio – Odd Numbers
If you are a reader of one of the blogs listed above, do e-mail their owners to demand that they feature a piece on the Lee–-Moretti paper.
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Learning in Investment Decisions: Evidence from Prediction Markets and Polls – (PDF file) – David S. Lee and Enrico Moretti – 2008-12-XX
In this paper, we explore how polls and prediction markets interact in the context of the 2008 U.S. Presidential election. We begin by presenting some evidence on the relative predictive power of polls and prediction markers. If almost all of the information that is relevant for predicting electoral outcomes is not captured in polling, then there is little reason to believe that prediction market prices should co-move with contemporaneous polling. If, at the other extreme, there is no useful information beyond what is already summarized by the current polls, then market prices should react to new polling information in a particular way. Using both a random walk and a simple autoregressive model, we find that the latter view appears more consistent with the data. Rather than anticipating significant changes in voter sentiment, the market price appears to be reacting to the release of the polling information.
We then outline and test a more formal model of investor learning. In the model, investors have a prior on the probability of victory of each candidate, and in each period they update this probability after receiving a noisy signal in the form of a poll. This Bayesian model indicates that the market price should be a function of the prior and each of the available signals, with weights reflecting their relative precision. It also indicates that more precise polls (i.e. polls with larger sample size) and earlier polls should have more effect on market prices, everything else constant. The empirical evidence is generally, although not completely, supportive of the predictions of the Bayesian model.
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