The Singularity University + The Prediction Markets

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Spot the 3 men on the right-side of the photo:

In blue, our good friend Mike Linksvayer of Creative Commons

– In red, the Google guy in charge of open-source software-

– In grey, Matt Mullenweg of WordPress.

Open Source Panel

So, my question to Mike:

Do you sense that prediction markets could be a topic at the Singularity University, or do you think that they couldn&#8217-t care less?

UPDATE: See the comments by Mike and a guy at that University&#8230-

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Mike Linksvayers networking groups at LinkedIn

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Mike Linksvayer

Obviously, this guy has good taste. Here is a sample of the LinkedIn networking groups he belongs to:


Here are the links to the networking groups managed by Midas Oracle (&#8220-PMs&#8221- is the most popular, the others are to be developed):

Planet Earth

Midas Oracle @ LinkedIn

Internet Strategy @ LinkedIn

Prediction Markets @ LinkedIn

Collective Forecasting @ LinkedIn

Chris F. Masse @ LinkedIn

Mike Linksvayer *himself* is to blame for the non-liquidity of his Wikipedia prediction markets.

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Mike Linksvayer:

Prior to the Wikipedia community vote on adopting CC BY-SA it crossed my mind to set up several play money prediction market contracts concerning the above outcomes conditioned on Wikipedia adopting CC BY-SA by August 1, 2009, for which I did set up a contract. It is just as well that I didn’t — or rather if I had, I would have had to heavily promote all of the contracts in order to stimulate any play trading — the basic adoption contract at this point hasn’t budged from 56% since the vote results were announced, which means nobody is paying attention to the contract on Hubdub.

Blame yourself, Mike. I blogged 10 times about the concept of &#8220-X group&#8221- &#8212-the symbiosis between a set of prediction markets and a set of bloggers.


Washington Mutual is seized by the US government.

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– New York Times

– Another one bites the dust:

(Sorry for those who have a narrow screen and don&#8217-t see the right part of this big chart.)

According to InTrade, here are the banks that could fail next:

– Bank United Financial

– Downey Financial

External Links About The Big Bailout:

– Reason magazine have collected opinions from the leading free-market economists on the Bailout issue.

There is no reason to expect the correct solution from the same people who created the crisis in the first place and who until very recently thought the economy was strong and that there was little or no chance of recession. [Mark Thornton]

This is a financial coup d&#8217-etat, with the only limitation the $700 billion balance sheet figure. [Yves Smith]

– Mike Linksvayer has some additional good links&#8230- and some strong words, too. :-D

– Arnold Kling:

– NYT:

UPDATE: Paul Krugman

UPDATE: The Manhattan Institute on financial crisis and the Bailout


Subsidizing real-money prediction markets and real-money conditional prediction markets

Should Google subsidize the Lunar X Prize contract on InTrade?

John Salvatier,

Our good friend Bo Cowgill might have already re-created those prediction markets on Google&#8217-s internal prediction exchange at a marginal cost of zero US dollar. No need for him to &#8220-subsidize&#8221- external prediction markets.

[As an appendix, I precise that I am in favor of opening the enterprise prediction markets to external traders, for some questions.]

Subsidizing prediction markets is an old Robin Hanson idea that carries quite a heavy price tag.

Conditional prediction markets is a great idea on the paper. Many people (e.g., Mike Linksvayer) like the idea. However, here is what the uncritical Robin Hanson fanboys blogging on Overcoming Whatever won&#8217-t tell you:

  • The first problem is that nobody trades those things.
  • The second problem is that subsidizing those conditional prediction markets costs an arm and a leg.
  • The third problem is that no major news media outlet has ever quoted the prediction market prices / probabilities generated by those conditional prediction markets.

Peter McCluskey could have rent a French mistress (or a French gigolo) for a full year with all the money he is spending on Robin Hanson&#8217-s idea. Or vaccinated the whole African continent against Malaria. See Peter&#8217-s comment, at the middle of the webpage, here.

Philanthropy and prediction markets are not mixing well &#8212-yet.

Ill make a $500 donation to the first think thank that makes an interesting, non-bogus use of real-money prediction markets before the end of 2007. Ill be the judge of bogosity and interestingness, but I can say that a paper about prediction markets counts as uninteresting.

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My Good Lord,

Mike Linksvayer

Would prediction market journalism (that is, showing to the normal people on the street that prediction markets can help understand better baseball games, or whatever else, on top of being fun and pure) fit your criteria of non-bogosity and interestingness?

Think tanks that talk about prediction markets should walk the walk, as should institutions that laud the rigors of the market generally.

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Dixit Mike linksvayer, last year.

Once again, Mike Linksvayer is right on target.

This guy is incredibly pertinent.

Mike is one of my best sources of inspiration.

Thanks to his two posts linked above, I&#8217-ll refine an idea of mine I&#8217-ve gotten recently.

One day, I&#8217-ll offer this vegan some box of foie gras, to thank him. Or maybe frog legs. Or snails. Or cheese that smells like people&#8217-s feet. Or the latest Michel Houellebecq. Or whatever with a French undertone. I&#8217-ll have to show him my appreciation for his indirect help in fertilizing my mind.

Mike Linksvayer

Mike Linksvayer&#8217-s little blog

Re-read Mikes testimony slowly, and then youll get which consumers need(s) prediction market journalism should fulfill.

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Mike Linksvayer:

Small comforts of prediction markets

Mike Linksvayer &#8212- November 19th, 2007

Yesterday I had dinner with a friend I hadn’t seen for a few years. I asked what he’d been doing, apart from being a nerd, and he said he’d been spending too much time following the U.S. presidential campaigns (actually just the Ron Paul campaign, but that’s not particularly relevant here). I realized that I don’t do this anymore. It could be because I’m maturing, but I’ll give credit to prediction markets.

Most of the yapping in the media is about the horse race and personalities, which I don’t care about, other than the status of the former. Instead I check prices at Intrade most days, which gives me a more accurate and much more concise status update than any amount of time spent reading or watching commentary.

Furthermore, betting that candidates I detest will win and against candidates I mind less, even in small amounts, really helps me not waste time thinking (mostly distressed thoughts) about the election.

So thank you prediction markets for the time and peace of mind!

Mike&#8217-s post is the most important piece of wisdom ever published about the prediction markets since the creation of the Iowa Electronic Markets in 1988.

Hence, I propose that the meager but smiling Mike Linksvayer be made the mascot of the prediction markets.

Mike Linksvayer

Mike Linksvayer&#8217-s profile at Midas Oracle

Nominatibility and Electability – 2008 presidential prediction markets

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Via our usual suspect Mike Linksvayer (recently featured in the New York Times for his weird diet), David Schneider-Joseph (a Foresight Exchange fanboy) on how to measure real electability of the US presidential candidates. Go reading his reasoning. His conclusion:

Put this way, it&#8217-s not a surprise that candidates with greater party ties have a greater chance of being nominated than their electability deserves. But that&#8217-s not the same thing as saying that their electability is actually lower than that of their competition.

Partisan impacts on the economy: Evidence from prediction markets and close elections – by Erik Snowberg, Justin Wolfers and Eric Zitzewitz – REDUX

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The breaking news is that Professor Justin Wolfers (of the Wharton business school in Philadelphia) has responded to my unforeseeable attack and to the subsequent Mike Linksvayer&#8217-s comment.

A quick response to Chris:
Let me clarify what I think the key puzzle is: the odds of either Democrats or Republicans are – literally – unchanged since the week before the 2004 election. It seems amazing to me that there has been *no news* that is relevant to the 2008 election.

And I don’t really know which way it should have gone (I’m not yet calling ‘08 for the Dems). For instance, Bush winning in ‘04 provides the Republicans with an incumbency advantage. Countering that, the last two years have provided the Dems with an advantage in the midterms, which you might think could persist to ‘08. And the cast of possible candidates is also starting to take shape, and the absence of Warner, the rise of Barak, and the continuing dominance of both Hillary and McCain are all important factors that we didn’t know about two years ago. All of this is hard to reconcile with the odds remaining unchanged.

I[n] response to Mike’s point: he is exactly correct to emphasize the difficulty in discerning the direction of causation between election outcomes and economic outcomes. But that is precisely the point of my forthcoming QJE paper with Snowberg and Zitzewitz (available at: PDF).

In that paper (which is what I describe in the WSJ), we look at stock market reactions to what are clearly random (or exogenous) shocks to the expectations of Bush’s re-election – the leaked exit polls, and the subsequent vote count. These experiments allow us to draw inferences about how changes in electoral prospects drive economic outcomes.

The Abstract Of That Paper:

Partisan impacts on the economy: Evidence from prediction markets and close elections – by Erik Snowberg, Justin Wolfers and Eric Zitzewitz – (PDF) – 2006-03-XX

Analyses of the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections. We sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during Election Day. Analyzing high frequency financial fluctuations following the release of flawed exit poll data on Election Day 2004, and then during the vote count, we find that markets anticipated higher equity prices, interest rates and oil prices and a stronger dollar under a Bush presidency than under Kerry. A similar Republican-Democrat differential was also observed for the 2000 Bush-Gore contest. Prediction market based analyses of all Presidential elections since 1880 also reveal a similar pattern of partisan impacts, suggesting that electing a Republican President raises equity valuations by 2 3 percent, and that since Reagan, Republican Presidents have tended to raise bond yields.