Never try to divine the IOC decisions on Olympics venues, Mike.

Prof Michael Giberson,

No &#8220-careful observer knew this in advance&#8221- (about Chicago being a lemon), for the simple reason that if they knew, they would have downgraded Chicago on the InTrade and BetFair prediction markets, and Ben Shannon would have not bet $6,000 on Chicago.

I look forward to your contrite correction on the frontpage of Knowledge Problem &#8212-in bold, and with a link to Midas Oracle, stating that &#8220-Midas Oracle is the only website in the world to have told you *not* to bet on Chicago a€”and to stay (far) away from any Olympics venue prediction market.&#8221-

My thesis holds: The International Olympic Committee (IOC) is a close aristocratic group that does not leak out good information.

IOC

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

– BetFair&#8217-s event derivative prices:

chicago-olympics-betfair

– InTrade&#8217-s event derivative prices:

chicago-olympics-intrade

– HubDub&#8217-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Who has the best analysis for Chicagos failed bid for the Olympics?

IOC

Prof Michael Giberson:

I think the a€?small, secretive committeea€? explanation is weak [].

Bradbury does an excellent job sifting through the shifting coalitions revealed in the three rounds of IOC voting. Neither Madrid nor Toyko showed any significant ability to attract votes as the rounds proceeded. It was going to be Rio or Chicago all along, but Chicago was weakest in the four-way vote and lost early, leaving the games to go to Brazil.

Based on Bradburya€™s [analysis], Ia€™m convinced that the decision was pretty much a toss up between Chicago and Rio. That conclusion was also implied in the prediction market prices just before the decision. Sure, the prediction markets favored Chicago, slightly, over Rio- I dona€™t think you can call it a miss given the closeness of the decision.

Well:

  1. The voting mechanism of the IOC regarding the 2016 Olympics venue was known to the news media and the prediction market traders (like Ben Shannon) well before the vote.
  2. The prediction market traders gave a surreal boost to the Chicago probability.
  3. The reality check is that Chicago was the weakest candidate.
  4. Hence, the prediction market traders were not informed enough about the basic facts regarding the IOC voting, for the reason that the International Olympic Committee is governed by secrecy, politics, and pork.

Next: &#8220-I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction.&#8221-

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

– BetFair&#8217-s event derivative prices:

chicago-olympics-betfair

– InTrade&#8217-s event derivative prices:

chicago-olympics-intrade

– HubDub&#8217-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

If Michael Giberson is wrong, then that means that Chris Masse is right.

Paul Hewitt:

I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.

If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.

I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.

Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.

The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

IOC

– BetFair&#8217-s event derivative prices:

chicago-olympics-betfair

– InTrade&#8217-s event derivative prices:

chicago-olympics-intrade

– HubDub&#8217-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Why did all the prediction markets get the Olympic decision to reject Chicago so wrong?

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The blogger at Sabernomics sees &#8220-this as a win for prediction markets, not a failure.&#8221-

I don&#8217-t share his views, but I wanted to link to his piece for you to make up your own mind about the issue.

Share This:

Could we have divined that Chicago was a lemon?

IOC

Prof Michael Giberson:

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, &#8220-any careful observer knew this in advance&#8220-, then the (mass or vertical) media would have reported about that, and, logically:

  1. the prediction market traders would have downgraded Chicago early on-
  2. 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.

YES, Harry Potter will survive J.K. Rowling’s 7th installment of the saga, The Deathly Hallows

Via Matt Drudge, via EITB 24, a hacker whose pseudonym is “Gabriel” tells you the ending of the book, The Deathly Hallows, yet to be published. He claims to have hacked one of the computers of the publisher. The bottom line is that Harry does not die, it seems.

I have just bought all the NewsFutures “Harry Potter will survive” contracts I could snap at $80. Plus, I was granted 10 pairs of contracts thru this program, and I sold the 10 “no” contracts to some misinformed trader at $20. Here’s my VIP page at NewsFutures. [I previously flip-flopped on this issue. :) ]

Just a short note on the NewsFutures prediction exchange: very usable. Our good doctor EJSS and his employees are detail oriented, and I think that’s the way to go. As I have written 10 times on Midas Oracle, this is about satisfying the sophisticated bettors, not the Joe Six-Packs. The folks at Pop Sci’s PPX should take notice. You know, I am on the receiving end of many youngsters’ claims to be “the next NewsFutures”. Well, my message to them: get up earlier, boys.

Here are all the blog posts and comments written about Harry Potter on Midas Oracle.

If I’m right to trust the hacker “Gabriel” and I win this game, then I’ll publish a victory blog post against Niall O’Connor and Michael Giberson. Niall O’Connor swallowed the William Hill story (All the money was on Harry Potter to die, so they stopped taking bets) like a lake carp swallows a peanut butter doughball. But, that’s too early. Let’s wait and see.

Harry Potter will survive The Deathly Hallows.

© NewsFutures

UPDATE: The sentiment of the majority favors the Niall O’Connor theory that puts William Hill at the receiving end of insider information (”Harry Potter dies”), lately. And the NewsFutures market-generated probability would reflect the (misinformed, on this one) “wisdom of crowds”, which kind of senses that an author for kids will not make the hero die. We’ll see.

UPDATE #2: eWeek.com

milw0rm is a group of politically motivated “hacktivists” whose most famous exploit was penetrating the computers of the Bhabha Atomic Research Centre (BARC) in Bombay, the primary nuclear research facility of India, on June 3, 1998. They have anti-nuclear and pro-peace agendas and, in this case, anti-Harry Potter and pro-Pope Benedict XVI.

UPDATE: The contract of the Harry Potter event derivative at NewsFutures may be flawed.

NEXT: THE FATE OF HARRY POTTER IN J.K. ROWLING’S 7TH BOOK, THE DEATHLY HALLOWS: prediction market vs. bookmaker + NEWSFUTURES JUDGES THAT HARRY POTTER IS STILL ALIVE AT THE END OF J.K. ROWLING’S 7TH NOVEL, THE DEATHLY HALLOWS.