Tag Archives: prediction exchanges

InTrade-TradeSports has a web server misconfiguration problem, and CEO John Delaney has a character problem.

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As I wrote at the time, the InTrade-TradeSports websites were unavailable, last Friday, August 29, 2008, during a good part of the morning.

InTrade-TradeSports is not only an event derivative exchange, but also a webspot that non-trading people often consult to get the latest market-generated probabilistic predictions. Last Friday, in addition to the traders, many people visited InTrade just to see what their prediction markets were saying about who would be John McCain&#8217-s pick as Republican vice presidential nominee. InTrade-TradeSports CEO John Delaney has said that that Friday saw 10 times more web visitors than any usual peak day, and that their server bandwidth was not large enough to cop with all solicitations. It is well known in the media business that servers should be configured many times bigger than for the normal usage &#8212-so as to accommodate exceptional peak times, when some impacting news break. My sentiment is that the InTrade-TradeSports technical team has probably not fully anticipated the growth of the InTrade-TradeSports followers.

As the result of this black Friday, some traders complained. One trader (Todd) started a thread on the InTrade e-mailing list. Unfortunately, Todd spiced his message with sarcasm. Which immediately irked John Delaney, who responded to the complaint, but also added a twisted line in effect inviting Todd to close his InTrade account.

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That remark offended another InTrade-TradeSports trader (Lucy Vega), who talked back to John Delaney:

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BetFair and InTrade-TradeSports are de facto monopolies (with 95% of the total business on their geographical zone, according to my estimation), and their direct competitors have far less liquidity, thus making them uninteresting for the big traders like Todd.

If John Delaney were really sincere in his wish to see the US public prediction market industry becoming legalized and experiencing a big growth in the coming decade, he should refrain from making offending remarks to his customers &#8212-even when those clients started the feud with some sarcasm of their own. This kind of bullying behavior could attract the attention of the US regulators in a negative way, which is exactly the reverse of what is needed at this time.

I can understand that John Delaney is sometimes upset by some of his ultra-demanding and sarcastic customers. However, as I said, the real-money prediction exchanges are in a situation of being de facto monopolies, where their market-generated information is of high social utility, which creates a social responsibility for the executives and managers of these prediction exchanges. You don&#8217-t insult and castigate a blogger who exposes a scandal. You don&#8217-t censor the CNBC reports. You don&#8217-t ask a complaining customer to close his / her account. All those things are big no-nos.

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UPDATE

I am re-publishing an old post of mine, as an appendix, to respond to some comments:

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Dan Laffan of InTrade has just given me permission to republish his e-mail(s) to Todd Griepenburg:

Todd,

We will absolutely not continue to be part of or facilitate any further diatribe with you on these issues.

If you are not satisfied that we
1. Have listened to your comments
2. Have replied to same and
3. Will take or have taken whatever corrective action is within our power and/or appropriate
then we reluctantly suggest that you consider closing your account on the exchange (or cease using it until our service meets your expectations). We say “reluctantly” as we do not wish to see any member leave, but we seem to be causing you immense dissatisfaction which is not our intention.

We will promptly close your account and return any funds you have in your account at your request. We await your decision and instruction.

Best regards,
Dan

Previous: A Big Trader’s Open Letter to TradeSports-InTrade + Second E-mail to InTrade-TradeSports + Third E-mail to InTrade-TradeSports + InTrade-TradeSports to Todd Griepenburg: GO TO HELL.

Dan Laffan to Todd: #1 – #2

InTrade to Todd

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UPDATE #2

For the full information of my readers, InTrade-TradeSports&#8217-s behavior is not the worst behavior that a prediction exchange can have towards an annoying customer. I am aware of another real-money prediction exchange who does close the accounts of the customers whom they view as problematic (and that, without citing any reason) &#8212-as opposed to just asking somebody to leave.

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UPDATE #3:

Todd&#8217-s new message to John Delaney

InTrade DOT NET – www.intrade.net

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This post is a very short review of their new website. I might publish a deeper review, later on.

The log line is that InTrade CEO John Delaney has ingested all the innovations that HubDub has brought to the prediction market scene since January 2007 (e.g., long and rich prediction market webpages that are indexed by the search engines, and use of social networking to boost trading) and has asked his technological team to clone those innovations for InTrade. This is great. I also appreciate that their charting system is satisfying. (The advanced charts seem to be of the right size, I have noticed. Neither too small, nor too big.)

On the negative side, the execution is not as good as it should be &#8212-and I&#8217-m polite. But to be fair with them, they say their website is still in &#8220-beta&#8221- &#8212-so let&#8217-s give them time to improve their work.

Overall, it&#8217-s a good move, and it shows, as I have said for months, that Nigel Eccles of HubDub is having a profound impact on the prediction market industry.

UPDATE: I forgot to mention that InTrade.net presents probabilities expressed in percentage, not prices, which they also took from HubDub.

How do InTrades prediction markets work, and are they really accurate?

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Thanks to the InTrade person who uploaded the first CNBC segment on YouTube, and fixed the initial technical problem.

I renew my asking for the second CNBC segment to be uploaded at YouTube, too. [If someone else than InTrade does it, please hit me with the YouTube URL. Thanks.]

My analysis:

  1. InTrade-TradeSports CEO John Delaney does a good job explaining the mechanism of the wisdom of crowds.
  2. They cut professor Justin Wolfers too short. It&#8217-s a nuclear disaster &#8212-once again. Justin Wolfers is an admirable and ultra friendly person, a great prediction market researcher, a good prediction market analyst, and a wonderful blogger, but his TV appearances are, so far, totally crappy. The guy needs to hire a publicist who will teach him to flatten his Australian accent and to talk straight and plain &#8212-to go to the point real quick.
  3. &#8220-It seems like someone at CNBC decided at some point that they would NEVER address the legality issue.&#8221- – Dixit Deep Throat.
  4. After the broadcast of the video shot in Ireland, the camera goes back to the TV set, and, at this point, the comments from the journalists and the guest (Steve Forbes) show that they still don&#8217-t understand fully the prediction markets. They don&#8217-t have the right facts, and their analysis is not crystal clear.
  5. Overall, a good explainer on the prediction markets &#8212-taken into account that CNBC is an entertainment media. For deeper explainers, see the Wall Street Journal, the Financial Times, or Midas Oracle.

YouTube video (the last part was censored by InTrade-TradeSports CEO John Delaney – PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

APPENDIX: CNBC video + CNBC video #2

UPDATE: The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

INTRADE-TRADESPORTS CEO JOHN DELANEY CENSORS CNBC ON YOUTUBE.

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– HE CENSORS THE END OF THE FIRST CNBC VIDEO SEGMENT TO FIT HIS MARKETING AGENDA.

– HE ORDERS THAT THE SECOND CNBC VIDEO SEGMENT NOT TO BE UPLOADED ON YOUTUBE.

THE PROOF OF THE CENSORSHIP:

YouTube video (whose last part was censored by InTrade-TradeSports CEO John Delaney – PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

PLEASE, SOMEBODY, DO UPLOAD THE FULL VIDEO SEGMENT ON YOUTUBE, UNCENSORED, AND HIT ME WITH ITS URL. I&#8217-LL RE-EMBED IT FOR EVERYONE TO SEE. THERE IS NO CENSORSHIP ON MIDAS ORACLE. WE ARE NEITHER IN CHINA NOR IN IRELAND. WE ARE FREE WORLD&#8217-S CITIZENS. WE WANT TO SEE THE NAKED TRUTH, NOT DOCTORED TAPES.

The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

APPENDIX: CNBC video + CNBC video #2

APPENDIX: THE ULTIMATE THING THAT TRADESPORTS-INTRADE CEO JOHN DELANEY WANTED TO CENSOR BUT COULDN&#8217-T THANKS TO MIDAS ORACLE.

The second CNBC video on InTrades prediction markets is up and running.

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CNBC video + CNBC video #2

In both segments, the appearance of Justin Wolfers is a nuclear disaster. They cut him ultra short. Maybe because of his strong Australian accent, I don&#8217-t know. But the end result is bad. It&#8217-s a pity. Justin Wolfers would have had many interesting things to say.

PS: InTrade people, please, put that on YouTube and tip me when it is done, so I can embed those videos.

UPDATE: YouTube video (the last part was censored by InTrade-TradeSports CEO John Delaney – PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

UPDATE: The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

CNBC airs an upbeat explainer about InTrades prediction markets.

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Via our good friend Jason Ruspini.

CNBC video + CNBC video #2

– Please, put that on YouTube, and then give me the YouTube URL. I&#8217-ll embed the video in another post.

– Who is that guy that they will interview later on, Jason??? [UPDATE: Serge Ravitch]

My observations:

  1. Quite upbeat. Almost an advertisement for InTrade.
  2. No mention whatsoever that InTrade is illegal in America.
  3. On the website, they call InTrade a &#8220-political futures market&#8221-.
  4. The InTrade critic was Barry Ritholtz. They just showed his blog. He wrote that the trading on InTrade is &#8220-pitifully&#8221- small.
  5. The first prediction market analyst they want to hear is InTrade CEO John Delaney. The second is professor Justin Wolfers. And that&#8217-s all.
  6. Steve Forbes asked whether &#8220-this thing&#8221- (InTrade) predicted Joe Biden &#8220-weeks ago&#8221-. The answer is that InTrade predicted Joe Biden some days ago.
  7. Joe Kerner put an emphasis on liquidity, whereas the emphasis should have been on the market as the mechanism that delivers a collective verdict.

UPDATE: YouTube video (the last part was censored by InTrade-TradeSports CEO John Delaney – PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

UPDATE: The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

How InTrade CEO John Delaney tried to undo the great damage done to the prediction market industry by Bobs little minions (among them, Robin Hanson and Justin Wolfers)

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John Delaney (CEO of InTrade) – (InTrade PDF file – CFTC PDF file):

Nearly all leading academics, not known for their attraction to unanimity, have publicly supported event markets. A great majority of these academics have been supplied with Intrade market data in the past, a service that Intrade intends to continue, for all study leads to an increase in transparency and understanding of event markets. It seems that the leading event market academics make no distinction between the benefits derived from academic owned markets like Iowa Electronic Markets and commercial market platforms like Intrade.

Yet many academics, with some notable exceptions, do temper their policy prescription to suggest a “safe harbor” for academic sites where research might be more generally available. As noted above Intrade has gladly supplied its event market data, typically free of charge to most of the leading prediction market academics and their students, and we are committed to encouraging the future study of event markets by continuing to supply our event market data free of charge or at very deep discounts. The academics that study event markets do a great service in developing our understanding of the strengths and weaknesses of event markets. Some commentators suggest that market liquidity and breadth typically benefit all event market stakeholders. Thus far commercial platforms like Intrade seem to be providing the greatest depth and breadth in event markets.

As Intrade has been a staunch supporter of event market academic study, and supplies greater depth and liquidity in its event markets than any other platform, it seems strange not to be a preferred purveyor. Perhaps the predominant reason many academics have held back from advocating and treating all event markets alike is a sense that initiatives to clarify or unwind the legislation restraining the optimal development of event markets is unlikely to be achievable. It seems many academics and commentators suggest a slow bureaucratic and pragmatic caution rather than focus on the optimal result. While the optimal result may be more challenging to achieve, for consistency, for better price discovery for the benefit of all, as well as for the development of Intrade, we encourage CFTC to apply common goals, objectives and standards for all participants.

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This discourse should be given to read to children in public and private schools, all over the world.

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How InTrade CEO John Delaney rightfully spanked the posteriors of Bobs little minions (among them, Robin Hanson and Justin Wolfers)

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John Delaney (CEO of InTrade) – (InTrade PDF file – CFTC PDF file):

Nearly all leading academics, not known for their attraction to unanimity, have publicly supported event markets. A great majority of these academics have been supplied with Intrade market data in the past, a service that Intrade intends to continue, for all study leads to an increase in transparency and understanding of event markets. It seems that the leading event market academics make no distinction between the benefits derived from academic owned markets like Iowa Electronic Markets and commercial market platforms like Intrade.

Yet many academics, with some notable exceptions, do temper their policy prescription to suggest a “safe harbor” for academic sites where research might be more generally available. As noted above Intrade has gladly supplied its event market data, typically free of charge to most of the leading prediction market academics and their students, and we are committed to encouraging the future study of event markets by continuing to supply our event market data free of charge or at very deep discounts. The academics that study event markets do a great service in developing our understanding of the strengths and weaknesses of event markets. Some commentators suggest that market liquidity and breadth typically benefit all event market stakeholders. Thus far commercial platforms like Intrade seem to be providing the greatest depth and breadth in event markets.

As Intrade has been a staunch supporter of event market academic study, and supplies greater depth and liquidity in its event markets than any other platform, it seems strange not to be a preferred purveyor. Perhaps the predominant reason many academics have held back from advocating and treating all event markets alike is a sense that initiatives to clarify or unwind the legislation restraining the optimal development of event markets is unlikely to be achievable. It seems many academics and commentators suggest a slow bureaucratic and pragmatic caution rather than focus on the optimal result. While the optimal result may be more challenging to achieve, for consistency, for better price discovery for the benefit of all, as well as for the development of Intrade, we encourage CFTC to apply common goals, objectives and standards for all participants.

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Excellent.

However, simply to say that we want the &#8220-optimal&#8221- solution won&#8217-t do the trick, alas. I&#8217-ll blog about that, later.

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How InTrade CEO John Delaney rightfully slammed Bobs little minions (among them, Robin Hanson and Justin Wolfers) as hypocrite and short-sighted -and how he told the CFTC to put Bobs petition (signed by Robin Hanson and Justin Wolfers, among others) in the trash can (where it belongs).

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John Delaney (CEO of InTrade) – (InTrade PDF file – CFTC PDF file):

Nearly all leading academics, not known for their attraction to unanimity, have publicly supported event markets. A great majority of these academics have been supplied with Intrade market data in the past, a service that Intrade intends to continue, for all study leads to an increase in transparency and understanding of event markets. It seems that the leading event market academics make no distinction between the benefits derived from academic owned markets like Iowa Electronic Markets and commercial market platforms like Intrade.

Yet many academics, with some notable exceptions, do temper their policy prescription to suggest a “safe harbor” for academic sites where research might be more generally available. As noted above Intrade has gladly supplied its event market data, typically free of charge to most of the leading prediction market academics and their students, and we are committed to encouraging the future study of event markets by continuing to supply our event market data free of charge or at very deep discounts. The academics that study event markets do a great service in developing our understanding of the strengths and weaknesses of event markets. Some commentators suggest that market liquidity and breadth typically benefit all event market stakeholders. Thus far commercial platforms like Intrade seem to be providing the greatest depth and breadth in event markets.

As Intrade has been a staunch supporter of event market academic study, and supplies greater depth and liquidity in its event markets than any other platform, it seems strange not to be a preferred purveyor. Perhaps the predominant reason many academics have held back from advocating and treating all event markets alike is a sense that initiatives to clarify or unwind the legislation restraining the optimal development of event markets is unlikely to be achievable. It seems many academics and commentators suggest a slow bureaucratic and pragmatic caution rather than focus on the optimal result. While the optimal result may be more challenging to achieve, for consistency, for better price discovery for the benefit of all, as well as for the development of Intrade, we encourage CFTC to apply common goals, objectives and standards for all participants.

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InTrade CEO John Delaney&#8217-s comment to the CFTC is a major contribution, and I&#8217-ll blog about it many times under different angles during this Summer 2008.

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