Link to the InTrade prediction market.
Below, I try to hot-link to the chart, I’-m not sure at this point it will work. We will see.
Tim Pawlenty
Tim… Who?
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Tag Archives: John McCain
Mitt Romney [or Sarah Palin] will be the Republican vice presidential nominee.
Tim Pawlenty won’-t go in Dayton, Ohio. So, it’-s Mitt Romney.
The play-money and real-money prediction markets were easily fooled with the Pawlenty rumors, yesterday.
That vindicates my message that the VP prediction markets feed on unreliable primary indicators.
I said from day one to be careful with the VP prediction markets.
I told you so.
UPDATE: It’-s probably Sarah Palin.
The vetting of the many potential Democratic vice president nominees was not as secretive as I thought. – Bo Cowgill was right, in hindsight.
The New York Times has a recount on how Barack Obama reached his decision on Joe Biden. The final decision was probably made 10 days ago, while Barack Obama was vacationing in Hawaii.
[…] Mr. Obama’s decision had as much to do with Mr. Biden’s appeal among white working-class voters and compelling personal story, and his conclusion that the Delaware senator was “-a worker.”-
The important information in the NYT piece is that Barack Obama personally called governor Bill Richardson “-late last week”- to announce him that he was not considered anymore. That’-s around the time the Joe Biden rumor began to have more weight in the media circles —-see the InTrade chart below.
Bo Cowgill, back in May 2008 (when I started to act as a prophet of doom):
This is dumb. Cover them if something interesting happens. Maybe your theory will turn out to be wrong. Anyhow: Although the decision is made in secrecy, the Presidential nominees have a number incentives which we have plenty of information about. Specifically:
* They want someone who will balance their tickets in terms of geography, race and class.
* They want someone who will help with weak areas of their campaigns.
* They want someone who will be a good campaign surrogate — giving good speeches and attacking the opponents effectively.
* They want to avoid a VP who will de-motivate or offend the base.
* They want to avoid someone with a bunch of skeletons in the closet such as angry ex-wives, out-of-wedlock kids, etc.
* Etc etc.
Anyhow, I don’t see any reason to ignore these markets in case something interesting happens. I read Midas Oracle so that I don’t *have* to read a whole bunch of other websites!
Bo Cowgill was on the right track, now that I think of it —-in a society where everything leaks out.
On the opposite of the spectrum, Tom Snee was too much extreme in his view:
According to Tom Snee of the Iowa Electronic Market, at Iowa University, futures markets need more hard information than they get in the veepstakes, to reliably predict a result.
Markets are very good at predicting elections, he says – but not choices being made inside Barack Obama’-s or John McCain’-s head.
Justin Wolfers was more measured.
So, Bo Cowgill and Justin Wolfers are the winners, on that one.
I was partially wrong. I am a bit too extreme, sometimes. (Did someone else notice that? 
) I need to learn more about…- granularity.
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PS: On the Republican side, now…-
Who will be the Republican Vice Presidential Nominee?
ENDLESS VEEPSTAKES: Why you should never trade on VP prediction markets, and why their probabilistic predictions are as stochastic as Paris Hiltons daily dress picks.
As I explained in early June 2008, the VP speculations that appear in the Press should never be taken seriously. Most of them (and you don’-t know which ones) are a big orchestration of pure lies aimed at creating publicity, or wicked lies in the form of trial balloons. The aims of the political campaigns are to:
- creating suspense (sometimes false) so as to generate free publicity-
- sending a positive message to the supporters of each VP candidate-
- letting the Press do the vetting of the VP candidates-
- flattering the political journalists by leaking to them-
- sending out false leaks so as to preserve the surprise for the scheduled announcement day-
- sometimes, buying time to impose the head of the VP search committee as the most serious VP candidate (remember Dick Cheney in 2000). [Psstt… Funny enough, in the 2008 election, Michael Moore is pulling for Caroline Kennedy. ]
All that means that there are no good primary indicators for the prediction markets on the Democratic and Republican VP-candidate selections.
I want to offer 6 remarks:
- Not all prediction markets are created equal. Some have good primary indicators (e.g., the prediction markets on the presidential elections, thanks to polls), while some other prediction markets have unreliable primary indicators (e.g., the prediction markets on who will be on the ticket).
- The prediction exchange executives (like InTrade-TradeSports CEO John Delaney) will never tell you that, because their job is to sell their wares, of course.
- The public needs prediction market analysts, who can judge the quality of the primary indicators of one particular prediction market, so as to separate the grains from the shaft —-reliable prediction markets from unreliable prediction markets. (A prediction market analyst has also other functions, which I will blog about later on.)
- A prediction market analyst should have a dual competency —-in a vertical (in our example, US politics), and in prediction markets.
- The expertise in the vertical (here, politics) should be a major, and the expertise in prediction markets should be a minor. Take a look at these 2 mainstream media news stories: the one written Jack Shafer in Slate (which I linked to at the top of this post), and the one written by Justin Wolfers in the Wall Street Journal. Obviously, the one that shows the most mastering is the one written by Jack Shafer, an American professional journalist who follows US politics for a living.
- The consequence of that for prediction market journalism is that the writer should be an expert in a vertical, and the editor should be an expert in prediction markets —-and not the other way around.
That said, I wish the very best of luck to our good friends Caveat Bettor (who is betting on Tim Kaine) and Nigel Eccles (who is predicting Joe Biden).
UPDATE: My (informal) Democratic VP-candidate bet is on Kathleen Sebelius. Hint, hint.
UPDATE: Gawker says that Joe Biden would be a horrible choice. I agree. Plus, he has denied to be the pick. He could have lied to reporters, though.
UPDATE: New York Times publishes portraits of all VP candidates.
DEVELOPING…-
Share:
CNN closed their 2 VP prediction markets… and immediately opened 2 not-brand-new VP prediction markets, with a full listing of candidate names, this time.
I told you that vice presidential search committees and VP prediction markets are complete bullshit, didnt I?
The McLaughlin Group of mid-June (yes, I know, that’-s last month):
MS. BERNARD: Well, here’-s what I think. I think the dirty little secret is Barack Obama probably already knows who he’-s going to select to be his vice presidential running mate. You put out the search committee, probably because Hillary Clinton was all over his back last week –-
DR. MCLAUGHLIN: So this is a smokescreen. This is a smokescreen.
MS. BERNARD: I don’-t know if it’-s a smokescreen, but I think he has a good idea who his vice presidential running mate is going to be. And the search committee is much ado about nothing.
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I told you so.
No good advanced, primary indicators.
Don’-t trade on VP prediction markets.
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US presidential hopeful John McCain hates the Midas Oracle bloggers.
Caught on video.
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Hear it for yourself:
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Dont trade on the VP predictions markets. – Dont bet on Hillary Clinton as VP. – Dont listen to betting bloggers who tell you that Hillary Clinton has a chance to be on the Democratic ticket. – Dont believe in vice presidential selection committees. – Select well your primary, advanced indicators. –
The topic of this post is:
Betting &- Information
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#1. Don’-t trade on the VP predictions markets.
I have stong reservations about those VP prediction markets. Only 2 men in the world know what is going to happen: Barack Obama, and John McCain.
You can’-t divine their final thoughts.
Politicians often lie about their intentions —-they also change mind, frequently.
The decision to name one VP nominee could be made in secret —-without any early warnings.
Surprise is a card that Barack Obama and John McCain could play. Don’-t bet against their final will.
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#2. Don’-t believe in “-vice presidential selection committees”-.
Last time, in 2000, a man named Dick Cheney was appointed to head George W. Bush’-s vice presidential selection committee.
He was supposed to scout around to find and assess good candidates.
Surprise, surprise, that fake committee ended up putting Dick Cheney on the Republican ticket —-and the rest is history (Iraq war, etc.).
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#3. Don’-t bet on Hillary Clinton as VP.
She does not have the slightest chance.
It’-s highly unlikely that Barack Obama selects her on the Democratic ticket.
Hillary Clinton as VP nominee (and as VP) would present many quasi insurmountable problems.
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#4. Don’-t listen to betting bloggers who tell you that Hillary Clinton has a chance to be on the Democratic ticket.
They are clueless.
Don’-t read clueless people. They are a waste of time.
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#5. Select well your primary, advanced indicators.
- Go to the sources of information. Discard filters. Your insatiable curiosity should drive your search for information.
- Use technology to select the best news articles out there. Bookmark Memeorandum for US politics (and TechMeme for information technology) —-they use bloggers’- links to select what’-s hot, a bit like Google’-s PageRank does.
- Use the crowd to sense what’-s hot or to discover marginally interesting tidbits. I have 56 friends on Google Reader who share their best items with me. I got many interesting stories that way, every day, from sources I would have never known about, otherwise. (Plus, I receive many e-mails each day from potential sources.)
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#6. Choose your bets (and trades) carefully.
Just because an event derivative is cheap doesn’-t mean that it’-s a good bet.
Don’-t pluck down money on a bet unless you’-ve seriously researched the topic by yourself —-and possesses some expertise or experience in that field.
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FOLLOW-UP POST: 2 days after my ringing the alarm bell… THE FREE FALL
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InTrade
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Democratic Vice President Nominee
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Republican Vice President Nominee
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BetFair
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Next Vice President:
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Democratic Ticket
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Democratic Vice President Nominee
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Republican Vice President Nominee
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NewsFutures
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Barack Obama will pick a woman as running mate.
© NewsFutures
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Explainer On Prediction Markets
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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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Who will be the next US Vice President, past January 2009?
UPDATE:
– To be kept updated on the prediction markets, go to the frontpage of Midas Oracle, or click on the InTrade tag.
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Here are the expired contracts about the Democratic vice presidential nominee (Joe Biden).
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Here is the expired contract about the Repuiblican vice presidential nominee (Sarah Palin).
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ORIGINAL POST:
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Unlike Bo Cowgill, I have stong reservations about those VP prediction markets. Read this WSJ post, for more.
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InTrade
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Democratic Vice President Nominee
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Republican Vice President Nominee
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BetFair
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Next Vice President:
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Democratic Vice President Nominee
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Republican Vice President Nominee
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NewsFutures
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Barack Obama will pick a woman as running mate.
© NewsFutures
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Explainer On Prediction Markets
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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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STRAIGHT FROM OUR U-TURN DEPARTMENT: Here are the VP prediction markets -all of them.
Don’-t you love the Web? Within 15 minutes after my posting my absolute and definitive refusal to publish any bits about the VP prediction markets, I received a long rebuttal by Google’-s Bo Cowgill —-whose great prediction market paper is still for you to download (PDF file), by the way.
Okay, Okay, Okay.
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InTrade
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Democratic Vice President Nominee
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Republican Vice President Nominee
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BetFair
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Next Vice President:
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Democratic Vice President Nominee
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Republican Vice President Nominee
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NewsFutures
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Barack Obama will pick a woman as running mate.
© NewsFutures
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Explainer On Prediction Markets
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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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