I would like to comment on the post from the Hatena Diary blog. (By the way, please note that my URL has changed, because I corrected one word in the post title. Sorry for the inconvenience.)
#2. Hedging-oriented prediction markets/exchanges: HedgeStreet and all the Chicago exchanges that will do binary, European call options.
#3. Forecast-oriented prediction markets/exchanges: Iowa Electronic Markets, AS CLAIMED BY THESE SCHOLARS WHOSE TASK WAS TO CONVINCE THE CFTC TO GRANT THEM A NO-ACTION LETTER. (They would have not gotten it, had they emphasized “-speculation”-. And, of course, “-hedging”- was out of question.) It’-s a “-claim”- that might be discussed, since we’-ve seen that TradeSports-InTrade is a much more powerful predictive tool for the US elections. Ditto for BetFair for U.K. elections.
#4. Decision-oriented prediction markets/exchanges: I would put here the kind of stuff that Robin Hanson is so excited about.
#5. Entertainment-oriented prediction markets/exchanges: Hollywood Stock Exchange, Washington Stock Exchange, Inkling, NewsFutures.
#6. Education-oriented prediction markets/exchanges: The Iowa Electronic Markets fits here, partially, regarding the use that professors around the country make of their markets in classrooms.
– I disagree with Google in #4. Maybe the Google internal prediction markets would fit in #3.
– I disagree with NewsFutures in #3 —-I acknowledge (at least partially) the predictive power of play-money prediction exchanges, of course.
Should we judge markets/exchanges on INTENTIONS or on RESULTS? I don’-t give a damn that TradeSports-InTrade and BetFair were created for speculation– if they have better predictive power than IEM, I’-m fine with them. Ditto for the HSX. I don’-t give the first fig that it was created as an entertainment tool. It’-s the best forecasting tool for the movie business, period.
Previous Blog Posts:
– Prediction Markets Definitions – by Robin Hanson – 2006-11-21
Addendum: Robin Hanson has posted a comment…-
“Oriented” is not clear enough for my tastes. Is this about trader motives? Trader results? Price results? Exchange motives?
My Answer: I meant “-exchange motives”-. […- See my comments. …-] But now that I think of it, another classification taking account of the “-price results”- makes more sense.
Previous blog posts by Chris F. Masse:
- Collective Error = Average Individual Error – Prediction Diversity
- When gambling meets Wall Street — Proposal for a brand-new kind of finance-based lottery
- The definitive proof that it’s presently impossible to practice prediction market journalism with BetFair.
- The Absence of Teams In Production of Blog Journalism
- Publish a comment on the BetFair forum, get arrested.
- If I had to guess, I would say about 50 percent of the “name pros” you see on television on a regular basis have a negative net worth. Frightening, I know.
- You can’t measure the usefulness of a system by how many resources it consumes.