Political prediction markets should move beyond mere horse-race forecasts to demonstrate larger social value.

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I agree with that.

The key, now, is to go beyond the accuracy issue and to move on to the utility issue.

It&#8217-s a much complex problematic, which those who have been over-selling the prediction markets are unwilling to undertake. [*]

Maybe a small bunch of prediction market people, maybe assembled in a new prediction market structure, might go for that lofty goal of fingering the specific instances where prediction markets create real social utility.

[*] Yelling across the harbor, like an illuminated Jesus Christ, that prediction markets can help &#8220-avoiding future [financial] crisis&#8221- is a sign that some prediction market practitioners have lost their intellectual compass. To my knowledge, InTrade hadn&#8217-t had any prediction market focused on the &#8220-looming credit crunch crisis&#8221-, last summer. Its CEO should be careful about making any grand statement. As I wrote many times, at best, the prediction markets are the best umpire you can have between either the mass media and the politicians, on one hand, and a group consisting of the best experts, on the other hand. An umpire is only useful during critical times, in a game. But, other than that, most of the times, the umpire is not the determinant of the game &#8212-the players are.

The researchers and practitioners should make a solid case for each of these critical instances where the prediction markets have a real social utility.

Stop the over-selling. Let&#8217-s start the real work.