The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

Last year, I said that the BetFair prediction markets on global warming would fail.

I said:

My prediction is that the first two BetFair Global Warming prediction markets (HSBC Investable Climate Change Index and ECX CFI Futures Contract) will fail miserably.

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They failed, indeed. Remain only those two prediction markets, with ultra light volumes: Highest and Lowest UK Temperature.

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As for the InTrade prediction markets on climate change (USA agrees before end of 2009 to reduce CO2 emissions by 10% or more by year 2025), liquidity is more than thin.

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Now, ask yourself:

If BetFair and InTrade (which are for-profit prediction exchanges) encounter difficulties with those &#8220-socially valuable prediction markets&#8221-, why would not-for-profit prediction exchanges (like the Iowa Electronic Markets) be more successful at it?
Don&#8217-t you think that the American Enterprise Institute&#8217-s proposals (which would outlaw the for-profit prediction exchanges) are out of whack? I do. Let&#8217-s do something.

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