He is well versed into prediction markets and journalism.
Just after HubDub’-s inception, he realized they fucked up their chart widgets. Five months later, they managed to correct that birth defect.
He is a guy humble enough to ask for pointers and feedback —-and he does listen up (see the point #4).
He is quite friendly.
HubDub is already a success.
HubDub serves a purpose for people: it mixes news and prediction markets in a novel way, which should give ideas to InTrade, TradeSports, BetFair, TradeFair, NewsFutures, etc.
In some kind of small ways, Nigel Eccles is pioneering “-the future of journalism“-.
If newspaper and magazine websites were to be interested in prediction markets, HubDub should be in the short list.
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Three things that Scottish guy hasn’-t computed yet, though:
You have to look down into the small prints, towards the bottom of their frontpage, to get the info that they have a blog. (((They master well mass e-mailing, on the other hand.)))
He hasn’-t cracked open prediction market journalism (a la Justin Wolfers), yet —-but I’-m confident that is coming.
Lawrence O’-Donnell (a leftist journalist –-but a good one, whom I appreciate):
A senior campaign official and Clinton confidante has told me that there will be a Democratic nominee by June 15. […] Yes, Clinton spokespersons publicly seem to be lost on gravity-free planet Clinton, but privately they know the end is near.
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There’-s a quasi consensus among the political pundits to say that Hillary Clinton will not be the Democratic nominee in November 2008.
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Tim Russert:
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That was Wednesday night. I have just watched NBC Nightly News this Thursday, and the same Tim Russert appeared with 2 white boards full of calculations, which all pointed to Hillary Clinton being toasted.
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My general thoughts about the place of the political prediction markets in this primary election season:
The weight of the political prediction markets in the US political scenery is close to epsilon. I have been monitoring Memeorandum (the Web’-s best political news and opinion aggregator), and it has never featured one piece of political prediction market journalism —-not only that, but none of the popular popular pieces, featured by Memeorandum, has ever mentioned the political prediction markets and their probabilities. The people who breathe politics on a daily basis (the experts and the bloggers) don’-t give the first fig about the prediction markets. They couldn’-t care less.
The prediction market luminaries who predicted that the prediction markets were to become a tool used in political campaigns were dead wrong. I have never read that campaign staffers use actively the political prediction markets. Campaigns use private polls, only.
Like in 2004 (when Howard Dean was crowned, early on), the prediction markets, at the start of the primary season, were incapable of foreseeing who would be each party’-s nominee, ultimately —-Barack Obama and John McCain both came out of the blue. But the polls and the political experts didn’-t see them, too.
Nothing surprising in that. While the idiots emphasize the supposed magical power of the prediction markets (using adjectives such as “-fascinating”- or “-intriguing”- when writing about them), the well informed people know for a fact that they simply aggregate information from the primary, advanced indicators and the opinions expressed by the political experts. Nothing more than that. The prediction markets are incapable of foretelling upsets, by essence.
The last weeks were particularly interesting, in that regard, because the Obama-vs-Clinton polls have been of no interest —-only the views of the political experts who could count in terms of delegates and super-delegates were of interest. The political prediction markets on the Democratic side, these last weeks, have been a reflection of the pundits’- calculations.
Outside of our blog, the only person who has aimed at practicing prediction market journalism is Justin Wolfers. He has understood the concept.
I would have my own concept of prediction market journalism, and I don’-t agree with the way he executes, but that’-s a detail. The main thing is that he has gotten the concept. That’-s what is important, and that’-s what makes all the difference between Justin Wolfers and the HubDub bloggers (for instance). The concept. The concept. The concept. The idea is to center the narrative around the inputs given by the relevant prediction market(s) —-not just gluing artificially news bits and a prediction market chart (or a link to a prediction market).
InTrade, BetFair and NewsFutures are, in my view, the 3 prediction exchanges that matter for prediction market journalism —-as of now.
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Now, the charts of the expired prediction markets —-starting with Pennsylvania (of 2 weeks ago):
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Yesterday’-s North Carolina:
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Yesterday’-s Indiana:
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Sources: InTrade &- BetFair
(Go there for the remaining primaries and caucuses. I don’-t put them on, here, because they don’-t matter anymore.)
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Now, the charts of the prediction markets, going forward:
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2008 US Presidential Election Winner – Individual
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2008 US Presidential Elections
Source: Dynamic, compound prediction market charts from InTrade
Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out…- Intelligence in, intelligence out…-
A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 6 times out of 10, the favored outcome will occur- and 4 times out of 10, the unfavored outcome will occur.
Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.
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More Info:
– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts
– Prediction Market Science
– The Midas Oracle Explainers On Prediction Markets
– All The Midas Oracle Explainers On Prediction Markets
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Previous blog posts by Chris F. Masse:
Prediction Markets
Meet professor Justin Wolfers.
Become “friend” with me on Google E-Mail so as to share feed items with me within Google Reader.
Nigel Eccles’ flawed “vision” about HubDub shows that he hasn’t any.
How does InTrade deal with insider trading?
Modern Life
“The Beacon” is an excellent blog published by The Independent Institute.
You can buy Giuliani on Q2 for .12 and sell Giuliani on Q1 for .52, and have a combination that will pay $1 no matter what for an outlay of .64. We want to take that .36 gain and turn it into $100. 100 / .36 = 277.777…-
So we’-ll buy 278 shares of each.The 278 shares cost 278 * (.12 + .52), which is 177.92. Whatever happens, you’-ll win $278, which puts you ahead by $100.
InTrade do not have any open “-Bertie Ahern”- prediction markets. InTrade do not have any closed “-Bertie Ahern”- either.
BetFair do have a series of “-Bye Bye Bertie”- prediction markets —-still open at the time of writing. So I deduce that they would want to close the contracts just after the Irish Prime Minister’-s effective resignation (in early May 2008). Which makes sense to me. (InTrade fell on Larry Craig’-s false resignation, as you may remember.) The BetFair event derivative contract only states:
When will Bertie Ahern officially cease to be Taoiseach of the Republic of Ireland? Unmatched bets will not be cancelled at any time. Users are responsible for their own positions. Users should be aware that they are NOT allowed to bet on this event if they are physically present in Austria or Germany.
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BetFair static chart (resignation to happen before January 2009):
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As a matter of experiment, I am going to try to paste just below a hot-linked BetFair chart…- to see if that works (that is, if BetFair accepts that bloggers do hot-link to their live charts). If you don’-t see the “-Bye Bye Bertie”- chart appearing in the line just below, don’-t mind.
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UPDATE: The experiment is successful. BetFair do accept that bloggers hot-link to their live charts. Great news. (My readers may remember that I did that same experiment with InTrade’-s advanced charts, some weeks ago, and that the experiment failed. But I’-ll re-do that InTrade experiment, a bit later.)
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Via HubDub, The Independent
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Previous blog posts by Chris F. Masse:
Thanks to enterprise prediction markets, senior management can move faster to deal with problems or exploit opportunities.
NOTE TO SELF: Set up customized e-mail alerts for brand-new, hot Midas Oracle stuff.
DAYS OF RECKONING, PART TWO: Matt Drudge features the prediction markets. + Reuters has the right terminology (“traders”, “prediction exchanges”) but ignores BetFair.
DAYS OF RECKONING: The New York Times is telling the business world that enterprise prediction markets are an essential management tool.
HubDub will soon distribute a continuously-updating chart widget displaying the state of their prediction markets.
As well as being a fun place for people to make their own predictions, Hubdub also provides real value to anyone looking for numerical forecasts of the way a news story will turn out. At its core, Hubdub is a prediction market, which means the probabilities given for any of the hundreds of news stories we track are a combination of the thousands of pieces of information brought to bear on each question by our users. While Hubdub is still a young service building a track record of the accuracy of its forecasts, similar prediction markets (both play and real money) have found a very strong relationship between the forecast chances and reality. When quoting one of our forecasts, the correct terminology is to describe the percentage as a “-percent chance”- or “-probability”-, not what a percentage of our users think, as this is not what is measured. For example, “-Hubdub is forecasting that Obama has a 67% chance of getting the nomination”- is correct, whereas “-67% of Hubdub users forecast that Obama will win the nomination”- is incorrect. If in doubt please contact us.
Another important difference with NewsFutures (where people have been “trading news” in 2000) is that hubdub doesn’t give away any prizes to performers. That, perhaps, is a direct consequence of the false good idea of letting people create their own markets. This not only creates many opportunities for fraud (if, for instance, the creator of the market also controls the outcome), but it also encourages incoherent outcome definitions, unverifiable outcomes, and duplicate or junkyard markets. Same problems that Inkling’s public markets suffer from.
Also, the mere idea of a Web 2.0 makeover of prediction markets is laughable. To paraphrase a good ol’ song from the 90’s, prediction markets were web 2.0 before web 2.0 was cool.
Emile Servan-Schreiber’-s criticism is pertinent. However, his conclusion (’-no’- to self-management of event derivatives) is too radical. Without Inkling Markets, we wouldn’-t have had Michael Giberson, who loves experimenting with play-money prediction markets. Somebody will come up, one day, with the right technology (e.g., a reputation system) patching the flaws that EJSS addresses. One day, in the future, we will be able to enjoy both worlds, because they will have merged into one: the libertarian prediction exchanges and the disciplined prediction exchanges.
My good doctor Emile, remember JFK, who pushed his country to do things “-not only because they are easy, but because they are hard“-, …-and succeeded. Just because event derivative management by traders is problematic does not mean that we should give up right now. Kudos to Inkling Markets and HubDub for trying, and acknowledging criticism from veterans.
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UPDATE: Emile Servan-Schreiber comments…-
No one has a monopoly on user-driven content. Every exchange out there lets people propose their own ideas for markets that might be of interest to themselves and others. For instance, on NewsFutures, a lot of the general forum discussion is back-and-forth between the users and the admins about which markets to create next. Where NF differs from FX, Inkling and Hubdub is that the NF admins (which, by the way, are recruited from the user-base itself) have the final control on wording as well as settlement. That’-s what guarantees the coherence of the exchange, which in turn means we are able to offer prizes, whereas the likes of FX, Inkling and Hubdub likely cannot because they give too much control away to unknown entities to guarantee the fairness of the contest.
I like NewsFutures, and I get all that. But I’-m saying that, nowadays, on the Web, people want DIY tools. That’-s why HubDub and Inkling Markets are appealing to them. They don’-t have to discuss “-back-and-forth”-. They create the event derivative they want. Straight from the producer to the trader.
Read the previous blog posts by Chris. F. Masse:
RIGHT-CLICK THIS IMAGE, AND FILL IN THIS SURVEY, PLEASE.
Papers on Prediction Markets
The Journal of Prediction Markets
The 45-degree Line
Implied Probability of an Outcome –BetFair Edition
Justin Wolfers on Rudy Giuliani = not convincing… yet
The Florida primaries thru the prism of the InTrade prediction markets
[…-] Also, the mere idea of a Web 2.0 makeover of prediction markets is laughable. To paraphrase a good ol’ song from the 90’s, prediction markets were web 2.0 before web 2.0 was cool.
Yeah, but Emile advertises his mastering of “-Web 2.0 tools”- on the NewsFutures frontpage —-while Inkling Markets and HubDug don’-t even mention the “-Web 2.0″- concept on their frontpage (I checked).
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Here’-s a screen shot of the NewsFutures website:
On Wednesday, January 30, 2008, at 9:00 AM PST (12:00 PM EST- 5:00 PM GMT- 6:00 PM CET), dollar-thirsty Nigel Eccles (pictured above) will be introducing HubDub at DEMO 2008 (one of the best IT conferences, along with eTech, LeWeb, CES, etc.). The DEMO website will be live-streaming the presentation video.
My best wishes go to Nigel Eccles for his presentation. (Is there something to win, at that DEMO conference? Is it a startup contest? Is there a trophy to win, at the end?)
In my view, the launch of HubDub (both a news aggregator and a MSR-powered, play-money prediction exchange) is a milestone.
It’-s not the first time that a prediction exchange adds content to its offerings (they all do that, now, even in small ways), but it’-s the first time that:
Quality content from the outside (that is, from professional media organizations, including news blogs) is systematically included into the exchange offerings-
Pertinent associations between the prediction markets and the news stories are proposed. (On top of the news aggregation mechanism, people vote for the most relevant stories on each prediction market page, so as to help the other traders to be better informed on the topic at hand. And, when creating an event derivative, the manager is asked to jot down keywords, which will be used by the search engine to harness links related to that prediction market.)
The Midas Oracle readers remember that I have been bullish on HubDub since day one. (See my previous post: HubDub wil redefine the play-money exchange landscape.) Others are now following.
I’-m not alone, anymore, in thinking that prediction market pages should published the URLs of the related advanced indicators (i.e., primary sources of information).
Internet usability expert Alex Kirtland (pictured above).
And, after a good discussion, others came in agreement with the no-brainer idea that more external links and more information can be good for the prediction markets. (Next obvious discoveries: The sky is blue- The sun rises from the East- Water is wet- War is bad- The Internet is world wide- The French fries are not fried in France- The French bread is not baked in France- etc. )
If you think of it, David Pennock (pictured above) is the man to hire to tackle the problematic of integrating news links/stories with prediction markets —-since he is a world-renowned expert in both microeconomics and search engine technology. We are on his turf, here. Hence, he should be the one leading us —-as opposed to us pulling him.
What should the humans do with the prediction markets? As Michael Giberson knows better than I do, probabilistic predictions are the offspring of the trading activities on the event derivative markets. At inception, BetFair and TradeSports didn’-t give the first fig about those probabilistic predictions, but today, the event derivative industry is being defined both by its betting side and its forecasting side.
And now we can see the main difference between the betting exchange approach and the prediction market approach: promoting (the trading of low-cost event derivatives) to bettors versus promoting (the generating of dynamic, objective probabilistic predictions) to people.
See, the prediction market approach consists in chasing people with news and probabilities. Hence, my personal version of HubDub would feature an aggregation news item (a la TechMeme, Memeorandum, or BallBug), mixed up with the appropriate InTrade/TradeSports/BetFair dynamic chart to give a hint on how the issue at hand will be settled in the near future. Content, first, and then the related prediction market chart —-as an informative appendix to a good scoop or quality analysis. The prediction market page would anti-chronologically list all the relevant news links.
And since the US (not Scotland) is the most fertile place for web search technologies, I bet that we will see soon some US-based HubDub-inspired startups popping up like champagne bubbles in the coming months and years.
Better Prediction Markets = A Better World
Read the previous blog posts by Chris. F. Masse:
WHY THE PREDICTION MARKETS WILL LIKELY F**K UP SUPER TUESDAY 2008.
Still unconvinced by prediction market journalist Justin Wolfers
Oprah Winfrey
RIGHT-CLICK THIS IMAGE, AND FILL IN THIS SURVEY, PLEASE.
As soon as you catch this post, RUSH THERE AND TAKE A VIRTUAL TOUR. Awesome. Nigel Eccles is the man. John Delaney, David Jack, Adam Siegel and Emile Servan-Schreiber can return to the locker room. Robin Hanson and Justin Wolfers are history artifacts, starting today. The whole world will look completely different after the HubDub launch.
How come nobody got that idea (news aggregation + prediction exchange) before HubDub???
Emile Servan-Schreiber of NewsFutures:
