Nate Silver’-s prediction (November 2, 2009): “-I’-d make Christie about the 4:3 favorite.”-
[ UPDATE: Nate Silver’s prediction post-mortem on the 2009 US elections.]
You can see that days before Elections 2009, InTrade was too heavy on Corzine:
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Formula One’-s Abu Dhabi Grand Prix in Yas Marina Circuit, Abu Dhabi, United Arab Emirates:
BetFair’-s favorite is Lewis Hamilton on McLaren-Mercedes.
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Bonus Track 
Ferrari World –- Ferrari theme park @ Abu Dhabi
UPDATE: FAIL.
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:
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:
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:
Robin Hanson‘-s auto-biography (i.e., how Our Master Of All Universes views HimSelf):
–
Do you find it hard to summarize yourself in a few words? Me too.
But I love the above quote. I have a passion, a sacred quest, to understand everything, and to save the world. I am addicted to a€?viewquakesa€?, insights which dramatically change my world view. I loved science fiction as a child, and have studied physics, philosophy, artificial intelligence, economics, and political science a€” all fields full of such insights. Unfortunately, this also tempted me to leave subjects after mastering their major insights.
I also have a rather critical style. I beat hard on new ideas, seek out critics, and then pledge my allegiance only to those still left standing. In conversation, I prefer to identify a claim at issue, and then focus on analyzing it, rather than the usual quick tours past hundreds of issues. I have always asked questions, even when I was very young.
I have little patience with those whose thinking is sloppy, small, or devoid of abstraction. And Ia€™m not a joiner– I rebel against groups with a€?our beliefsa€?, especially when members must keep criticisms private, so as not to give ammunition to a€?them.a€?A I love to argue one on one, and common beliefs are not important for friendship a€” instead I value honesty and passion.
In a€?77 I began college (UCI) in engineering, but switched to physics to really understand the equations.A Two years in, when physics repeated the same concepts with more math,A I studied physics on my own, skipping the homework but acing the exams.A To dig deeper, I did philosophy of science grad school (U Chicago), switched back to physics, and was then seduced to Silicon Valley.
By day I did artificial intelligence (Lockheed, NASA), and by night I studied on my own (Stanford) and hung with Xanadua€™s libertarian web pioneers and futurists.A I had a hobby of institution design– my best idea was idea futures, now know as prediction markets. Feeling stuck without contacts and credentials, I went for a Ph.D. in social science (Caltech).
The physicist in me respected only econ experiments at first, but I was soon persuaded econ theory was full of insight, and did a theory thesis, and a bit of futurism on the side.A I landed a health policy postdoc, where I was shocked to learn of medicinea€™s impotency.A I finally landed a tenure-track job (GMU), and also found the wide-ranging intellectual conversations Ia€™d lacked since Xanadu.
My Policy Analysis Market project hit the press shit fan in a€?03, burying me in media attention for a while, and helping to kickstart the prediction market industry, which continues to grow and for which I continue to consult.A The press flap also tipped me over the tenure edge in a€?05- my colleagues liked my being denounced by Senators. 
A Tenure allowed me to maintain my diverse research agenda, and to start blogging at Overcoming Bias in November a€?06, about the same time I became a research associate at Oxforda€™s Future of Humanity Institute.
My more professional bio is here.
–
Robin Hanson is an associate professor of economics at George Mason University, and a research associate at the Future of Humanity Institute of Oxford University. After receiving his Ph.D. in social science from the California Institute of Technology in 1997, Robin was a Robert Wood Johnson Foundation health policy scholar at the University of California at Berkeley. In 1984, Robin received a masters in physics and a masters in the philosophy of science from the University of Chicago, and afterward spent nine years researching artificial intelligence, Bayesian statistics, and hypertext publishing at Lockheed, NASA, and independently.
Robin has over 70 publications, including articles in Applied Optics, Business Week, CATO Journal, Communications of the ACM, Economics Letters, Econometrica, Economics of Governance, Extropy, Forbes, Foundations of Physics, IEEE Intelligent Systems, Information Systems Frontiers, Innovations, International Joint Conference on Artificial Intelligence, Journal of Economic Behavior and Organization, Journal of Evolution and Technology, Journal of Law Economics and Policy, Journal of Political Philosophy, Journal of Prediction Markets, Journal of Public Economics, Medical Hypotheses, Proceedings of the Royal Society, Public Choice, Social Epistemology, Social Philosophy and Policy, Theory and Decision, and Wired.
Robin has pioneered prediction markets, also known as information markets or idea futures, since 1988. He was the first to write in detail about people creating and subsidizing markets in order to gain better estimates on those topics. Robin was a principal architect of the first internal corporate markets, at Xanadu in 1990, of the first web markets, the Foresight Exchange since 1994, and of DARPA’-s Policy Analysis Market, from 2001 to 2003. Robin has developed new technologies for conditional, combinatorial, and intermediated trading, and has studied insider trading, manipulation, and other foul play. Robin has written and spoken widely on the application of idea futures to business and policy, being mentioned in over one hundred press articles on the subject, and advising many ventures, including Consensus Point, GuessNow, Newsfutures, Particle Financial, Prophet Street, Trilogy Advisors, XPree, YooNew, and undisclosable defense research projects.
Robin has diverse research interests, with papers on spatial product competition, health incentive contracts, group insurance, product bans, evolutionary psychology and bioethics of health care, voter information incentives, incentives to fake expertize, Bayesian classification, agreeing to disagree, self-deception in disagreement, probability elicitation, wiretaps, image reconstruction, the history of science prizes, reversible computation, the origin of life, the survival of humanity, very long term economic growth, growth given machine intelligence, and interstellar colonization.
Robin Hanson‘s auto-biography (i.e., how Our Master Of All Universes views HimSelf):
–
Do you find it hard to summarize yourself in a few words? Me too.
But I love the above quote. I have a passion, a sacred quest, to understand everything, and to save the world. I am addicted to “viewquakesâ€, insights which dramatically change my world view. I loved science fiction as a child, and have studied physics, philosophy, artificial intelligence, economics, and political science — all fields full of such insights. Unfortunately, this also tempted me to leave subjects after mastering their major insights.
I also have a rather critical style. I beat hard on new ideas, seek out critics, and then pledge my allegiance only to those still left standing. In conversation, I prefer to identify a claim at issue, and then focus on analyzing it, rather than the usual quick tours past hundreds of issues. I have always asked questions, even when I was very young.
I have little patience with those whose thinking is sloppy, small, or devoid of abstraction. And I’m not a joiner; I rebel against groups with “our beliefsâ€, especially when members must keep criticisms private, so as not to give ammunition to “them.â€Â I love to argue one on one, and common beliefs are not important for friendship — instead I value honesty and passion.
In ‘77 I began college (UCI) in engineering, but switched to physics to really understand the equations. Two years in, when physics repeated the same concepts with more math, I studied physics on my own, skipping the homework but acing the exams. To dig deeper, I did philosophy of science grad school (U Chicago), switched back to physics, and was then seduced to Silicon Valley.
By day I did artificial intelligence (Lockheed, NASA), and by night I studied on my own (Stanford) and hung with Xanadu’s libertarian web pioneers and futurists. I had a hobby of institution design; my best idea was idea futures, now know as prediction markets. Feeling stuck without contacts and credentials, I went for a Ph.D. in social science (Caltech).
The physicist in me respected only econ experiments at first, but I was soon persuaded econ theory was full of insight, and did a theory thesis, and a bit of futurism on the side. I landed a health policy postdoc, where I was shocked to learn of medicine’s impotency. I finally landed a tenure-track job (GMU), and also found the wide-ranging intellectual conversations I’d lacked since Xanadu.
My Policy Analysis Market project hit the press shit fan in ‘03, burying me in media attention for a while, and helping to kickstart the prediction market industry, which continues to grow and for which I continue to consult. The press flap also tipped me over the tenure edge in ‘05; my colleagues liked my being denounced by Senators. 
 Tenure allowed me to maintain my diverse research agenda, and to start blogging at Overcoming Bias in November ‘06, about the same time I became a research associate at Oxford’s Future of Humanity Institute.
My more professional bio is here.
–
Robin Hanson is an associate professor of economics at George Mason University, and a research associate at the Future of Humanity Institute of Oxford University. After receiving his Ph.D. in social science from the California Institute of Technology in 1997, Robin was a Robert Wood Johnson Foundation health policy scholar at the University of California at Berkeley. In 1984, Robin received a masters in physics and a masters in the philosophy of science from the University of Chicago, and afterward spent nine years researching artificial intelligence, Bayesian statistics, and hypertext publishing at Lockheed, NASA, and independently.
Robin has over 70 publications, including articles in Applied Optics, Business Week, CATO Journal, Communications of the ACM, Economics Letters, Econometrica, Economics of Governance, Extropy, Forbes, Foundations of Physics, IEEE Intelligent Systems, Information Systems Frontiers, Innovations, International Joint Conference on Artificial Intelligence, Journal of Economic Behavior and Organization, Journal of Evolution and Technology, Journal of Law Economics and Policy, Journal of Political Philosophy, Journal of Prediction Markets, Journal of Public Economics, Medical Hypotheses, Proceedings of the Royal Society, Public Choice, Social Epistemology, Social Philosophy and Policy, Theory and Decision, and Wired.
Robin has pioneered prediction markets, also known as information markets or idea futures, since 1988. He was the first to write in detail about people creating and subsidizing markets in order to gain better estimates on those topics. Robin was a principal architect of the first internal corporate markets, at Xanadu in 1990, of the first web markets, the Foresight Exchange since 1994, and of DARPA’s Policy Analysis Market, from 2001 to 2003. Robin has developed new technologies for conditional, combinatorial, and intermediated trading, and has studied insider trading, manipulation, and other foul play. Robin has written and spoken widely on the application of idea futures to business and policy, being mentioned in over one hundred press articles on the subject, and advising many ventures, including Consensus Point, GuessNow, Newsfutures, Particle Financial, Prophet Street, Trilogy Advisors, XPree, YooNew, and undisclosable defense research projects.
Robin has diverse research interests, with papers on spatial product competition, health incentive contracts, group insurance, product bans, evolutionary psychology and bioethics of health care, voter information incentives, incentives to fake expertize, Bayesian classification, agreeing to disagree, self-deception in disagreement, probability elicitation, wiretaps, image reconstruction, the history of science prizes, reversible computation, the origin of life, the survival of humanity, very long term economic growth, growth given machine intelligence, and interstellar colonization.
Xpree CEO Mat Fogarty:
Chris,
Management struggles to understand and plan for the future. When forecasts are inaccurate, corporations incur huge costs due to inventory write-offs, stock-outs, misallocated resources or cost of capital. Collective intelligence delivers objective, accurate forecasts in real time, thus saving many millions of dollars for our corporate clients. The solution is not being oversold, to the contrary, the potential vastly exceeds current awareness and adoption.
“-If foresight is not the whole part of management, at least it is an essential part of it”- (Henri Fayol, 1916).
In my 10 years experience as a management accountant and corporate planner, I have witnessed multiple forecasts suffer from inaccuracy due to uncertainty and biases. Whether forecasting a launch date, sales volume or cost of development, it is the systematic biases due to incentive systems, politics and common cognitive errors that contribute more to inaccuracy than the uncertainty. The problem stems from the fact that the owner of a forecast is normally the owner of the business unit / sales team / project, and budgets and bonuses are based on forecasts. This necessitates game playing and politics and makes the development of an objective, accurate forecast near impossible.
Collective intelligence can overcome these problems by incentivising a diverse crowd of knowledgeable employees to share their insight, balancing the resulting estimates, and rewarding accuracy and timeliness.
However, we are at an early stage in the development of this opportunity. There is still work ahead of us to develop the ideal mechanism to combine simplicy of UI [user interface] with richness of information gathering. In addition, we need to further develop the way collective intelligence interfaces with traditional corporate structures, processes and systems. These are Xpree’-s challenges…- stay tuned.
Mat
CEO, Xpree
Robert Scoble interviews their CTO.
Video
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Predictify is not a prediction exchange. We think prediction markets are superior to polls and surveys, don’-t we?
With Predictify, the mechanism delivering the collective verdict is simplistic: it’-s a poll —-with possibility to get down to each individual answer.
Their conversation is very interesting, nevertheless —-in great part due to Robert Scoble’-s intense curiosity.
Technically, the video is awesome and plays well —-even with my old computer and slow DSL line. Kudos to the Fast Company techies.
UPDATE: I don’-t like that their video starts off automatically, though. With YouTube, we decide to play the video —-it is not imposed on us.
UPDATE: Alas, their embedded video does not go into the blog feed. 
–
UPDATE: I e-mailed my remarks to Robert Scoble, and he’-s asked to his techie to look into the issues.
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UPDATE: I see that the video does not start on its own, now. They managed to correct that. Rest the fact that their videos don’-t go into feeds.
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