Prof Michael Giberson:

I think the a€?small, secretive committeea€? explanation is weak [].

Bradbury does an excellent job sifting through the shifting coalitions revealed in the three rounds of IOC voting. Neither Madrid nor Toyko showed any significant ability to attract votes as the rounds proceeded. It was going to be Rio or Chicago all along, but Chicago was weakest in the four-way vote and lost early, leaving the games to go to Brazil.

Based on Bradburya€™s [analysis], Ia€™m convinced that the decision was pretty much a toss up between Chicago and Rio. That conclusion was also implied in the prediction market prices just before the decision. Sure, the prediction markets favored Chicago, slightly, over Rio- I dona€™t think you can call it a miss given the closeness of the decision.

Well:

1. The voting mechanism of the IOC regarding the 2016 Olympics venue was known to the news media and the prediction market traders (like Ben Shannon) well before the vote.
2. The prediction market traders gave a surreal boost to the Chicago probability.
3. The reality check is that Chicago was the weakest candidate.
4. Hence, the prediction market traders were not informed enough about the basic facts regarding the IOC voting, for the reason that the International Olympic Committee is governed by secrecy, politics, and pork.

Next: &#8220-I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction.&#8221-

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

– BetFair&#8217-s event derivative prices:

– InTrade&#8217-s event derivative prices:

– HubDub&#8217-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Paul Hewitt:

I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.

If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.

I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.

Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.

The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.

–

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

– BetFair&#8217-s event derivative prices:

– InTrade&#8217-s event derivative prices:

– HubDub&#8217-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?