BRITISH CRETINERY: The Financial Times features the InTrade probabilities -not the BetFair ones.

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This is really stupid. The decerebrated journalos at the FT chose to feature the illiquid, Ireland-based, un-regulated InTrade prediction markets instead of the very liquid, UK-based, regulated BetFair prediction markets on the next British congress.

Makes no sense at all.

The BetFair PR boys have an omelet on their face. They should work harder.

DISAMBIGUATION: The &#8220-illiquid&#8221- adjective refers to the UK political markets on InTrade &#8212-not the US political prediction markets.

Robust, the prediction markets are the best mechanism for aggregating information. Thus, companies should use them for assessing strategy and hedging risks.

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Via Emile Servan-Schreiber of NewsFutures, John Auters in the Financial Times.

[…] This leads to [Justin Wolfers]&#8216- claim that [prediction markets] are the best way to aggregate information. This is true of any given amount of information. Take three economists and make them trade out a market over their predictions for next month&#8217-s inflation number, he suggests, and they will arrive at a more accurate prediction than a poll of the same three economists. In a market, those with stronger conviction (or inside information) can express that conviction- those less confident will not be willing to stake money. […]

Prediction markets remain subject to the same weaknesses as other markets. The principle of &#8220-garbage in, garbage out&#8221- [*] applies. If there is only poor information to aggregate, they will be as wrong as everyone else. […]

It would make sense to incorporate these odds when making investments. […]


(I don&#8217-t get his micro slam against the wisdom of crowds. Anyway.)

[*] As explained in the prediction market explainer published on the frontpage of Midas Oracle.

??? charity-driven prediction markets OR social issue prediction markets ???

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But, contrary to what Lucy Berholtz thinks, the former will go further than the latter &#8212-in my view.

My thoughts about the Financial Times article on Bet2Give:

  1. I have said from day one that it&#8217-s a great idea.
  2. This is a &#8220-unique&#8221- concept&#8230- until InTrade-TradeSports, Betdaq and BetFair-TradeSports decide to create a charity wallet for their traders. Complex, sure, but that might come, one day.
  3. I have the highest esteem for Lucy Berholtz, generally, but I&#8217-m with Emile Servan-Schreiber on the idea that Bet2Give is not a simple marketing trick. All the money but a small percentage goes to the traders&#8217- selected foundations. If all US betting were organized that way, that would mean a huge windfall for US foundations.
  4. Tyler Cowen makes sense.
  5. As for LongBets, it&#8217-s a failed experiment in my judgment. Too many one-sided &#8220-predictions&#8221- for only a fistful of agreed &#8220-bets&#8221-.