Analysis (Data) - Page 3 of 7 - Midas Oracle.ORG

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Measured Enthusiasm for Prediction Markets – (PDF file) – by Jason Ruspini.

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My thoughts:

Peter McCluskey thinks they are &#8220-futures&#8221-.
PAM was only extremely marginally about &#8220-terrorism and assassination futures&#8221-.
Even though they don&#8217-t do much more than discounting known information, &#8220-prediction markets&#8221- is not a misnomer, since the term means that each prediction (in the form of an event derivative contract) is traded on a market.
&#8220-Decision-aid markets&#8221-, not &#8220-decision markets&#8221- &#8212-I&#8217-d leave that last denomination for Robin Hanson&#8217-s original idea, when the decision applies automatically, after the trading.
And what was Justin Wolfers&#8217- reasoning? Might we know? (And why did you swallow it?)
Which are the manipulation papers making &#8220-unrealistic assumptions&#8221-? Names, please.
Tax futures are great. But, who else in the world, other than mister Ruspini, believes that they can be fiscal hedging vehicles? (Not doubtful. Just asking. External links, please.)

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Jason Ruspini on the regulation of US event derivative markets:

CFTC-like regulation would save these markets from having to navigate national and state gambling laws, but would come at the cost of flexibility. Some contracts would not be approved for political reasons even if they had demonstrable hedging utility and “economic purpose”.

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Our good friend Barry Ritholtz.has persuaded himself that our real-money prediction markets suffer from an irremediable and fatal problem: liquidity on political event derivative markets is too thin for smart Wall Street people like him to take their market-generated probabilities seriously. Barry Ritholtz is keen to tout oranges&#8211-apples comparisons: the NYSE volume versus the Obama&#8211-Clinton volume at InTrade. It&#8217-s a bullshit argument, but he managed to persuade some gullible journalists writing for some clueless mainstream media that thin liquidity was responsible for the New Hampshire upset &#8212-and else.

Barry, if you had 1,000,000,000 trades on the New Hampshire prediction market, you&#8217-d still have an inaccurate prediction. The polls were wrong, and there&#8217-s nothing &#8230- NOTHING&#8230- that the InTrade and BetFair traders could have done to get this election right. Get over it, Barry. Traders are not magicians.

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[For why the polls were wrong, see: The New York Times, Zogby, Rasmussen, Gallup…]

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Midas Oracle.ORG – Predictions & Innovation

Prediction Markets, Collective Intelligence, Innovation and Growth

Category Archives: Analysis (Data)

Multi-millionaire, Republican, professor of economics Greg Mankiw uses Jason Ruspinis tax prediction markets at InTrade to assess the probability that a hypothetical John McCain presidency starting in 2009 assumes a raise in federal taxes.

HubDubs Nigel Eccles ridiculizes Paul Kedroskys post bashing the prediction markets after the Sarah Palin upset.

Why didnt you bet with the crowd, then? You could have made a killing at the time when Joe Biden was under 50.

Never trust a politician.

Answering Koleman Strumpfs riddle

In black, the comment made by the ubber president of the Pennock fan club. But I want Jason Ruspini to dissent in the comment area with another argument.

JASON RUSPINIS CROCKERY: The Brain states forcefully that they are not event futures, but binary options. Still, as soon as he premieres prediction markets on tax rates at InTrade, he calls them tax futures -of course.

Ubber finance blogger Barry Ritholtz believes in magic. He believes that, with more volumes on the event derivative markets, comes the Omniscience -capital O.

WISDOM IN CROWDS COMMENTS: Who cares about the accuracy of the prediction markets when the polls (or the exit polls) are giving us the primary information that is, a bit later, reflected in the prediction markets?