Truly amazing. Watch.
Battle of Branchage from seeper on Vimeo.
3D projection mapping onto an old castle
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Auditing the Federal Reserve – Ron Paul style
The prediction market links that Robin Hanson does not want you to read
Feedback trading in prediction markets
Robin Hanson is schooled about prediction market trading.
Our guest author to our Master Of All Universes:
Feedback trading just means the kind of momentum trading that is pervasive in traditional assets, again, less so in prediction markets. In the biastest experiment, traders were given formal “-clues”- about the settlement, but for many market participants, the best “-clue”- (even rationally, if lazy) is recent price action. Even if feedback trading was possible within the experiment, the outcome (manipulation attempts were corrected) suggests that it wasn’-t prevalent.
In this experiment, traders were given equal endowments of shares/currency…- i.e. initially had equal account sizes. Yes, there were an equal number of manipulators and non-manipulators, but they could not coordinate. Even if they were implicitly coordinating, this is not the same as a single large trader influencing the market. Yes, in the theory paper trading sizes were variable, but according to the same parameter for each trader. Maybe if there were a large supply of potential traders able to frictionlessly join the manipulated market, a manipulator’-s relatively deep pockets wouldn’-t matter.
The Journal of Prediction Markets… may harm your computer.
According to Google Search:
I suppose that their server got infected by a computer virus. They should disinfect it —-and make a better use of Google Webmaster Central Tool, which warns early on about malware problems.
Missing TEXT and CATEGORIES widgets in WordPress.org
BetFair co-founder Ed Wray laments the suppression of UKs tax incentive for startup entrepreneurs.
BetFair chairman Ed Wray: “-Too many hurdles in the way of enterprise”-.
Wray refers to a tax incentive that he and Black used to launch Betfair after they were forced to go to friends and family for funds, having failed to raise capital from institutional investors.
“-That was very useful in terms of getting the business off the ground. Everything I see now is about cutting back on those opportunities.”-
Dont worry too much about the Dubai World default.
Robin Hanson cant ignore Paul Hewitt anymore.
Spot the comments in the following posts:
– Robin Hanson to Paul Hewitt –- #1
– Robin Hanson to Paul Hewitt –- #2
The Robin Hanson manipulation papers make unrealistic assumptions, but its not like prediction markets are a bad idea…!!…
In terms of unrealistic assumptions in Robin Hanson’-s series of papers on manipulation, the major ones have been out there since at least 2004.
Despite some limited evidence, the insistence on traders needing to know the direction of manipulation isn’-t too compelling since the direction will be manifest insofar as the price is “-wrong.”- “-Noise trader”- is a politically loaded and misleading term. Misleading because it suggests that the mean effect will be zero, when in reality “-noise trading”- usually takes the form of feedback trading. Lack of feedback trading is a significant assumption in the Hanson manipulation papers. Fortunately, prediction markets have objective settlements at specified times, unlike traditional assets where the meaning of prices is open to interpretation, making them more prone to feedback trading and irrational booms and busts.
With prediction markets, conditions for manipulation are more favorable when the settlement is far off in time, and when there are subjective inputs to the settlement, e.g. in politics. A distant settlement simultaneously makes it less clear what the real price should be, and delays manipulator losses because there is less incentive to correct price. At the limit, a manipulator could introduce a price distortion when a contract is launched, only to reverse position for small liquidity-related loss immediately before settlement, thereby destroying the markets “-integral”- of error over time.
Another big assumption, also identified by Paul Hewitt, is that traders have equal account sizes. But maybe this isn’-t a huge problem if settlement is forthcoming, and maybe the issue could be mitigated with additional exchange disclosures, such as the standard deviation of position sizes in a given market. While this could discourage liquidity as large traders would become paranoid about their positions, it is essentially a “-soft”- position limit, and traders would be forewarned of one-sided markets (which could of course be the result of someone well-informed, but I –- the google-anonymous* writer –- would bet that more concentration comes with more error on average…- this can be tested by someone with the data, of course maintaining trader anonymity)
Even accounting for long-term settlement, feedback trading, semi-subjective settlements, and account size imbalances, it seems one would have to abide to an overly rigid tenet of “-do no harm”- to hold that prediction markets are, on net, a bad idea. (Do no harm is of course abhorrent to libertarians, and even doctors don’-t actually follow such a rule.) Moreover, some pathologies like political self-fulfilling prophecy will only happen if prediction markets have already demonstrated their value and have become more popular. But even if one believes in their long term success, single pathologies can damage one’-s reputation permanently…- if one plans to die at a reasonable age.
[*Given the political climate, many firms have issued directives to employees to not engage in even the slightest appearance of impropriety, which might include blogging on manipulation.]