Previously: Will Chicago get the Olympics? Dona€™t bet on it. Too risky.
Midas Oracle is the only website in the world to have told you *not* to bet on Chicago -and to stay (far) away from any Olympics venue prediction market.
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Yearly Archives: 2009
Could we have divined that Chicago was a lemon?
Chris, isna€™t it odd for you to state a€?Chicago had not the slightest chance to begin with.a€? The phrase implies you believe that the probability of Chicagoa€™s selection was near zero all along, but you have been claiming that it is impossible to predict anything about the outcomes of IOC selection processes.
Also, the NYT article reports on backbiting and disarray at the USOC. While the article is published after the IOC decision, presumably any careful observer knew this in advance [*] and you are suggesting it was relevant to the outcomes of the IOC market, i.e. you are suggesting it is a reason to have believed the Chicago selection as particularly unlikely. Again, this suggestion is contrary to your earlier views suggesting IOC decisions are unpredictable because there is no good information to aggregate.
I look forward to your correction!
[*] You presume too much, doc.
If, as you said quite cockily, “-any careful observer knew this in advance“-, then the (mass or vertical) media would have reported about that, and, logically:
- the prediction market traders would have downgraded Chicago early on-
- Ben Shannon (who is a smart man and a well informed bettor) would not have bet 6,000 bucks on Chicago.
The proof is in the pudding, doc.
You are wrong and I am right.
The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.
Look up prof Michael Giberson’-s comment below my highly intelligent post, “-Why an analyst should assess each newly created prediction market“-.
And compare it with Paul Kedrowski’-s bad analysis, followed by InTrade CEO John Delaney’-s equally bad analysis.
Read the New York Times for more on why Chicago had not the slightest chance to begin with.
Previously: Will Chicago get the Olympics? Dona€™t bet on it. Too risky.
Why you wont hear Robin Hanson et al. about the Chicago Olympics prediction market disaster
– Because they are not interested in telling you the truth about prediction markets.
– They are interested in propagating a myth, rather.
– Don’-t pay $400 for a vendor phone-booth conference on prediction markets, where their merits are hyper inflated to serve commercial purposes. Stay at home and read Midas Oracle.
Previously: Will Chicago get the Olympics? Dona€™t bet on it. Too risky.
Why an analyst should assess each newly created prediction market
The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.
As we have blogged here many times, not every prediction market is created equal. Some are bound to aggregate bits of known information. Some others (e.g., the Olympic city prediction markets) are not able to do that, because no good information is leaking out. The IOC is a close aristocratic group that does not leak out good information. Those who forgot that and bet the farm on Chicago are now licking their wounds. You need an information analyst to assess whether a particular prediction market is pertinent.
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
Professor Thomas Rietz (Iowa Electronic Markets) was so wrong on the usefulness of prediction markets about the 2016 Summer Olympics in Chicago.
Chicago Olympic Market Might Have Value, Says Reitz (Chicago Tribune, April 17)
A credible source of information about Chicago’-s chances of hosting the 2016 Olympics would have value, says columnist Bill Barnhart. Local real estate developers, hotel operators, employment agencies, vendors of products and services to major events and others have a direct stake in whether or not an Olympics is staged here. Politicians and civic leaders presumably would want to know whether the city’-s bid has a chance, so that they wouldn’-t throw good money after bad. An auction market centered on whether Chicago will win could provide that information, even if there were no huge payoff for hedgers or speculators, said finance professor THOMAS RIETZ at the University of Iowa, a board member of the popular Iowa Electronic Markets. The Iowa market limits wagers to $500 but has an enviable track record in picking the winners of national elections. “-Our goal is to aggregate information, which is a different goal than being able to hedge the economic risk associated with something like this,”- Rietz said. “-I don’-t think it’-s an outlandish idea.”-
http://www.chicagotribune.com/business/yourmoney/chi-0704160447apr17,0,2547860.column?coll=chi-business-hed
Prediction markets on which country will host the Olympics have never worked.
– BetFair’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):
– InTrade’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):
– HubDub’-s event derivative prices:
Irrational Decision Making – Dan Ariely
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Chicago wont have the Olympics in 2016.
The Chicago candidacy, which was favored by the prediction markets (and bettors like Ben Shannon), is the one that fared the worst.
– “-Will Chicago get the Olympics? Dona€™t bet on it. Too risky.“-
– The prediction markets are not able to forecast which country will get the Olympics. The IOC is a close aristocratic group that does not leak information. Hence, it is not possible to aggregate information.
– Once again, Ben Shannon made a very bad bet. He should read Midas Oracle more often —-if he wants to avoid personal bankruptcy.
– Once again, we see that the P.R. agents of InTrade and BetFair (who both bragged about being able to predict Chicago) were overselling.
– BetFair’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):
– InTrade’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):
– HubDub’-s event derivative prices:
How I make at least $1,000 a month working on Amazons Mechanical Turk.
Wisdom of crowds in popular culture, again
“-The wisdom of crowds”- has apparently seeped a bit into popular culture, or at least the geekier end of it.
On the heels of British illusionist Derren Brown’-s invoking of “-the wisdom of crowds”- as a (false) part of his explanation of how he appeared to predict winning lottery numbers, last night a character in the American TV show House invoked the wisdom of crowds as part of an explanation for how he obtained a diagnosis of his medical condition.
(The character –- a highly intelligent, geeky, successful video game designer –- posted his medical symptoms on the internet and offered $25,000 for a successful diagnosis. Then, mentioning “-wisdom of crowd”- based reasoning, concluded that the most frequent diagnosis appearing in emailed responses was likely correct. As the story turned out, the crowd-sourced diagnosis was incorrect. Instead, the correct diagnosis was submitted by series main character Greg House, working from home after quitting his job at the hospital. The “-wisdom of crowds”- element doesn’-t make it into the official episode summary.)
Although the crowd was wrong (the better to highlight how clever our main character is when, later, he provides the correct diagnosis), at least the basic “-wisdom of crowds”- logic illustrated in the episode was correct. As a fan of the show, I appreciate that it doesn’-t insult my intelligence by dressing up clever cons with misleading science-based patter.
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