– Manipulation?
– Logical flaw?
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ADDED BONUS: Additional thought on arbitrage.
UPDATE: The HubDub PM on who will win the 2nd debate.
Criticism about InTrades prediction markets on the InTrade prediction markets
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Tag Archives: Economics
On pinching Gods nose
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.
Via Marginal Revolution
P(tax hike / McCain) = 74%.
APPENDIX: Robin Hanson does not know yet who he is going to vote for, in November 2008…- and feels that no scholar can help him.
The economist Robin Hanson predicts that some of our computronium-based progeny may colonize the cosmos in a peaceful, cooperative manner, like nice liberal Democrats.
John Horgan in the WSJ
…-“-like nice liberal Democrats”-…- ha! ha! ha! 
—- …- like Mike Linksvayer, then…- (depending on your meaning of “-liberal”-)…-
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Previous blog posts by Chris “GadFly” Masse:
- PROF TOM W. BELL, PLEASE, DO SKIP THE PAGAN CELEBRATIONS, AND, PLEASE, DO RETURN TO YOUR DESK TO FINISH THE DRAFT OF YOUR COMMENT TO THE CFTC. THANKS FOR YOUR PRAGMATIC (NOT ‘ETHEREAL’) CONTRIBUTION TO “THE FUTURE OF HUMANITY”. (There is a hidden slam to Robin Hanson in this title. I wonder whether people will get the joke.)
- The CFTC is going to close the comments in 3 days. We have 3 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges (e.g., InTrade USA or BetFair USA), and counter the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).
- TOM W. BELL: “Thanks, Chris. Thanks, too, for being such an effective gadfly. I might well have blown off the whole exercise if you had not kept blogging about how you were awaiting my comment!”
- What to think of HedgeStreet’s comment to the CFTC
- The freshest comments sent to the CFTC
- “To someone like me who trades professionally and also ran for Congress a few years back, InTrade is a marriage made in heaven.”
- HOW TO DESTROY INTRADE, TRADESPORTS AND BETFAIR: a betting application for FaceBook
Bo Cowgills boss = Hal Varian
UPDATE: Bo tells us: “-Actually, that’s my desk right behind him, in the top picture.”-
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Using Prediction Markets to Track Information Flows: Evidence from Google – (PDF file – PDF file) – by Bo Cowgill, Justin Wolfers, and Eric Zitwewitz – 2008-01-06
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Blip.TV –
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Previous blog posts by Chris F. Masse:
- POLLS VERSUS PREDICTION MARKETS: Justin Wolfers retorts to Bob Erikson.
- Based on market data from a tiny prediction exchange (IEM, which is much smaller than InTrade-TradeSports or BetFair), a couple of researchers claim that prediction markets do not have superior predictive power. — And, adding salt to injury, they call our prediction market luminaries (Robin Hanson, Justin Wolfers, etc.)… “naive”.
- Do the media avoid reporting the bad omens that is sometimes reflected in the prediction markets?
- BetFair’s brand-new bet matching logic
- Quizz Of The Day — Monday Morning Edition
- BEWARE THE BLOGGING ACADEMICS: They are not blogging to inform us —they are blogging to promote themselves.
- Did Jason Ruspini and friends cash in on huge moves in prices of oil, natural gas, coal and other parts of the energy patch, this semester?
STRAIGHT FROM THE TRUISM DEPARTMENT: Money buys happiness.
The richer people and countries become, the happier they get.
Wow, that’-s what I call a discovery.
Freakonomics – #2 – #3
New York Times
CNBC video
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Previous blog posts by Chris F. Masse:
- Just like the armchair generals (presented on television as “military analysts”) carry the Pentagon’s propaganda, are our economics professors (who need the exchange data to pursue their academic career) in fact John Delaney’s unofficial P.R. agents, hidden behind an appearance of objectivity, and whose agenda is to generate favorable news coverage for InTrade? Is the symbiotic relationship between the prediction exchanges and the economics researchers dangerous for the truth?
- Can we still trust Betfair? Should we trust Betfair? Or indeed, any betting exchange?
- Prediction Markets at Google — by Peter A. Coles, Karim R. Lakhani, Andrew McAfee
- Is that HubDub’s Nigel Eccles on the bottom left of that UK WebMission pic?
- Collective Error = Average Individual Error – Prediction Diversity
- When gambling meets Wall Street — Proposal for a brand-new kind of finance-based lottery
- The definitive proof that it’s presently impossible to practice prediction market journalism with BetFair.
We will never have a perfect model of risk. – by Alan Greenspan
The most credible explanation of why risk management based on state-of-the-art statistical models can perform so poorly is that the underlying data used to estimate a model’s structure are drawn generally from both periods of euphoria and periods of fear, that is, from regimes with importantly different dynamics.
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FOLLOW UP
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Freakonomics did not quiz Bo Cowgills boss, Hal Varian, on prediction markets -triple alas.
Freakonomics interview. (I did ask, but they didn’-t listen.)
Hal Varian’-s post.
Read the previous blog posts by Chris F. Masse:
- OutReach
- If Warren Buffett can’t figure out derivatives, can anybody?
- Many people twitter on prediction markets.
- Folks, when you have something important to say, write up a full post, not a comment.
- 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
Yes, Economics is a Science.
ESA:
The Economic Science Association (ESA) is a professional organization devoted to economics as an observational science, using controlled experiments to learn about economic behavior. The ESA welcomes participation by economists interested in the results of such experiments, as well as scholars in psychology, business, political science, and other related fields.
What is experimental economics?
Experimental methods allow us to control economic institutions, information, policies, and other important variables, both in the laboratory and in the field. Laboratory techniques also make it possible for us to observe and control variables that would not be observable in the field, such as the preferences of buyers and the costs of sellers in the trading of an artificial good.
Experiments have provided important information about economic behavior in a variety of subdisciplines of economics, including game theory, consumer behavior, industrial organization, public finance, and labor economics.
Is economics a science? Greg Mankiw and Tyler Cowen answer “-yes”-. See also Wikipedia.