CFM hated it when Peter McCluskey wrote:
What many of us want from prediction markets bears more resemblance to the products of think-tanks than it does to any other institution that I’-m aware of
But this reminds me of something. When has a pro-market think tank ever subjected its policy recommendations to market evaluation? Never, as far as I know.
The Independent Institute published a book chapter on Decision Markets by Robin Hanson in Entrepreneurial Economics. When institute Research Director Alexander Tabarrok gave a talk on the book, you can guess what subject he spent the most time on.
Think tanks that talk about prediction markets (AEI-Brookings is another) should walk the walk, as should institutions that laud the rigors of the market generally. This could involve setting up and running a non-profit exchange or paying Intrade to offer certain contracts, or variations between.
Many think tank proposals have virtually no chance of implementation. These would not be ideal candidates for prediction market evaluation, but not all think tank prescriptions are politically impossible, and much of what think tanks do is critique proposals that do stand real chance of implementation. If the choice is between yet another Op-Ed and a contract on the subject, I’-ll take the latter.
I’-ll 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. I’-ll be the judge of bogosity and interestingness, but I can say that a paper about prediction markets counts as uninteresting.
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A grouping that loves to talk about markets (that is when they’-re not going off on incoherent rants) but hates any sort of evaluation consists of U.S. Libertarian Party candidates, activists, and donorsfools. Each election there are LP candidates who vigorously argue that they have a good shot at winning significant office or at least obtaining millions of votes in the case of the U.S. Presidency, ignoring 35 years of abject failure.
The case of Michael Badnarik’-s “-campaign”- for U.S. Congress ending last month is a hilarious case in point. He raised over $400,000, claimed he could win, and got …- 4 percent of the vote. He’-s now begging for another $200k and it turns out his “-campaign”- “-manager”- is starting his own Scientology-like religion.
That’-s not all that out there for an LP campaign, nor is it surprising–-there is no competition from non-wackos for candidacies that are doomed to failure.
One LP campaign this cycle that didn’-t appear to be crazy but nevertheless radically overestimated its chances of success was that of Bob Smither, running in Tom DeLay’-s GOP district against a Nick Lampson, a Democrat ex-Congressperson (who won easily) and a write-in Republican. Because the TX-22 race this year was unusual it was one of several seats Intrade ran markets on. The Intrade market included DEM, GOP, and FIELD contracts. FIELD could be taken as representing Smither, so this may have been the very first LP candidacy evaluated by traders. (FIELD exists in most Intrade election outcome markets but typically attacts no trading, as the field hasn’-t a snowball’-s chance in hell.) Their evaluation was not kind, as I pointed out in a blog post and several times in comments on a blog (no longer live) that hyped Smither’-s chances, where I goaded fans to place bets. Smither polled 6%, against 51% for the Democrat and 43% for the write-in Republican.
One doesn’-t need a prediction market to see that LPers are delusional, amnesiac, or just plain stupid. But as someone with strong libertarian sympathies (actually like prediction market legal scholar Tom W. Bell I’-d prefer to take back the word liberal) I’-ll gladly take additional opportunities to rub the facts in the face of my embarrassing and hypocritically scared-of-markets fellow travellers in the LP.
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Did I say baiting? Oops, I meant betting!
The Libertarian party is like any other third party; they don’t want to win so much as they want to make people who disagree with them lose. When William F. Buckley ran for mayor of New York (on the Conservative) ticket, he was asked what he’d do if he won. His answer: “Demand a recount.” He didn’t win, but he took away enough votes to cause an upset (and his brother later won a Senate seat as a Conservative). If irresponsible LP members are promising a victory, they’re doing it because that’s what politicians have to do to be taken seriously; if they’re expecting a defeat, they’re as delusional as you claim.
I don’t see a party doing much with political futures — parties are organizations used to win elections, not to determine good policies, and I don’t think there’s a lot of election-winning expertise that a market can tap but a campaign manager can’t. I don’t think the LP is any good at winning elections (obviously), which is why I’m a Republican. But they really don’t deserve to be mocked for something they aren’t trying to accomplish in the first place.
The think-tank offer is noted. Do individuals count as think-tanks?
If Wikipedia says a particular individual is a think thank, perhaps, otherwise no.
But there are startup think tanks that are more or less one person operations plus support from networks like Atlas and the State Policy Network that would qualify. See the NYT on think tank startups last month.
I would prefer that a think tank pays InTrade-TradeSports or BetFair to set up socially relevant prediction markets, instead of running anything.
You said: “This could involve setting up and running a non-profit exchange or paying Intrade to offer certain contracts, or variations between.”
The LP doesn’t want to win. It wants to take away enough net votes from one party or the other to be a powerbroker. Over the past few years, it has cost the GOP quite a few Senate seats and governorships, so it is making its point–the problem is that, because libertarians are, if anything, more Democratic now, the LP has lost leverage on the Republican Party. Five years ago, the consensus was that Libertarians cost the GOP 2 voters for every voter they cost the Democrats, but the times they are a-changin.
Re: Byrne, NY has had very idiosyncratic third-party rules in place since the Progressive era that allow candidates to run on multiple party lines. Buckley ran as both a Conservative and a Republican if memory serves, and the vote was split between a Liberal and a Democrat, so he nosed his way in between them.
And as for Smither, a lot of Republicans (particularly Erick of http://www.redstate.com) wanted Smither over Sekula-Gibbs. There was legitimate support for Smither at all levels, but it didn’t reach a critical mass.
Alex, anything LPers want (and they are collectively schizoid about what that is), they are bad at getting it. Their “leverage” was always retrospective and imaginary.
Smither did have some legitimate support, which made his candidacy marginally interesting to traders. The Intrade market accurately reflected his lack of critical mass.
Libertarian vote share never counted as “leverage” in terms of the Libertarians having a representative who brought the GOP to the negotiating table to hammer out something that would be mutually satisfactory to libertarians and conservatives. But it was always a protest outlet that (should have) kept the GOP somewhat wary of spending too much time on Terri Schiavo gamesmanship and not enough on things that actually matter to the non-hardcore theo 70%.
I think that this time, the libertarians just went Democrat instead of registering a protest vote. Libertarians have decided that party differences on social issues are far wider than differences on economic ones, and economic differences became impossible to discern in a Friedmanite (government spending not taxes) sense. So libertarians are going to settle with the Democrats for a good while.
Now that Wall St. seems to have a lot of sway over the D’s, I think the libertarians will find themselves surprisingly comfortable in the Democratic Party over the next few years.
Alex, the protest vote never has been a significant factor. Libertarians did not shift their votes from the LP to the Democrats in 2006. The LP got more votes in comparable congressional races than it did in 2004 (but still amounted to nothing).
The last couple cycles libertarians have been increasingly voting for Democrats instead of Republicans. That’s the significant trend, though I think it has a whole lot more to do with the GOP settling into DC than the Democrats cozying up to Wall St.
I shhould’ve left out the fringe electoral part of the above post, it was a funny afterthought, an embarrassing lapse of self control. There is no point in mocking the hopeless and irrelevant. It isn’t even funny. I will. Stop.
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