Prediction Markets = Betting Markets = Event Derivative Markets
They don’-t agree, but I don’-t care. I am right, and they are wrong. 
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Prediction Markets = Betting Markets = Event Derivative Markets
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Tag Archives: event derivative markets
The Accuracy Of Prediction Markets
– A Lesson in Prediction Markets from the Game of Craps –- by Paul Hewitt
– Why Public Prediction Markets Fail –- by Paul Hewitt
Both articles are required reading for Jed Christiansen and Panos Ipeirotis (alias “-Prof Panos”-).
Patrick Young (InTrades fifth Beatle) still cant figure out the industry he helped created.
Well, we’-re here to help out the lost souls.
Director and Founder: Intrade
Privately Held- 11-50 employees- Capital Markets industry
September 1999 – February 2002 (2 years 6 months)
I was one of the founders and a director of the company Intrade which set up one of the first sports exchanges in Europe.
Nowadays there is a vogue for calling these businesses prediction markets…-which presumably mans there must be markets that don’-t predict events and trade on past [occurrence]?
No, it means that prediction markets are optimized for simplicity and usability —-as opposed to the other derivative markets, which are quite complicated and inaccessible to the mainstream people.
Mike Linksvayer *himself* is to blame for the non-liquidity of his Wikipedia prediction markets.
Prior to the Wikipedia community vote on adopting CC BY-SA it crossed my mind to set up several play money prediction market contracts concerning the above outcomes conditioned on Wikipedia adopting CC BY-SA by August 1, 2009, for which I did set up a contract. It is just as well that I didn’t — or rather if I had, I would have had to heavily promote all of the contracts in order to stimulate any play trading — the basic adoption contract at this point hasn’t budged from 56% since the vote results were announced, which means nobody is paying attention to the contract on Hubdub.
Blame yourself, Mike. I blogged 10 times about the concept of “-X group”- —-the symbiosis between a set of prediction markets and a set of bloggers.
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Were prediction markets useless during the H1N1 breakout?
Might this be an instance where prediction markets greatly out-performed the experts? In short, no. There were relevant markets but two big problems:
- No one thought to create a market for the number of flu cases over a couple of thousand.
- Prediction markets require a verifiable outcome so they were based on CDC confirmed cases. But after the flu turned out not to be that dangerous, the CDC stopped confirming most cases and there were less than 7500 confirmed cases by the end of May.
Prediction markets are a zero-sum game.
Did you lose money betting on InTrade, lately? Well, your money ended up in the pocket of that guy:
UPDATE: There was nothing about “-hating the game”- in my post. It was just a reference to the “-sheep and wolves”- concept floated by Robin Hanson. (See also the Iowa Electronic Markets research on their traders.)
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Prof Panos hates it when I point to a prediction market failure.
Patenting the prediction markets?
MicroSoft have patented the prediction markets.
Well, at least, one aspect of the prediction markets.
Uniited States Patent Application:
CONTINUOUS BETTING INTERFACE TO PREDICTION MARKET
Abstract
A user participates in trading securities in a prediction market which represent different outcomes of an event, using an interface which allows the user to understand a trade in terms of a bet. The interface also allows the user to explore different bet amounts while receiving feedback on potential payoffs in real time. In one approach, a tool is used which is moved in one direction by the user to indicate a larger trade for an outcome, or in the opposite direction to indicate a larger trade against the outcome. A bet for an outcome can be translated into a purchase of a corresponding security which represents the outcome. A bet against a particular outcome can be translated into a purchase of securities which represents all other outcomes. The user interfaces hides complexities of the market from the user while surfacing relevant information.
Inventors: BERG- HENRY G.- (Redmond, WA) – PROEBSTING- TODD A.- (Redmond, WA)
I won’-t comment on this, because I believe that the US patent system is broken, generally speaking.
Prediction markets about science and technology
http://science.newsfutures.com/
NewsFutures + Science &- Vie (a science magazine published in the F country)
In French, alas, but I am sure Emile would lend the same technology to some English-speaking magazines in the U.S. or the U.K. that would want to open the same kind of prediction exchange for science.