Tag Archives: ntubbbb

Ireland – Prediction Markets on the 2007 Irish General Election

Posted on by
4

No Gravatar

BetFair

Niall O&#8217-Connor&#8217-s comment:

All seats in the 30th Dail have now been filled, with the allocation of seats as follows: Fianna Fail 78, Fine Gael 51, Labour 20, Progressive Democrats 2, Green Party 6, Sinn Fein 4, Others 5. Fianna Fail are five short of an overall majority in the Dail parliament, which meets on June 14.

The most likely outcome for the next Government is a coalition between the ruling party Fianna Fail, the two Progressive Democrats, and some of the others (independents).

In relation to the Betfair market one would therefore assume that this would be the &#8220-Any Other Party or Coalition&#8221- option. However, on reading the rules, one sees that: &#8220-Who will form the next government? Independents do not count for the purposes of this market.&#8221-

So, we have the ridiculous situation, that those that backed a FF/PD coalition, expecting the PDs to do much better, will actually still be on a winner, because Independents are excluded from the market, even though the PDs will only form part of the next Government because of the presence of the Independents. And those that backed &#8220-Any other party or coalition&#8221- and did not read the rules will find themselves on a loser. Bizarre.

Previous blog posts by Chris F. Masse:

  • The FaceBook profiles of the 2 most important men of the field of prediction markets
  • THE HUMAN GADFLY WHOSE OBJECTIONS ROBIN HANSON IS DUCKING…???…
  • Google now considers Midas Oracle as a major blog.
  • Horizon 2015: A long-term strategic perspective for the real-money prediction markets
  • Join our group at LinkedIn to have your “Prediction Markets” badge on your profile. It’s ‘chic’. (“Groups” info should be set as “visible”, in your profile options.) We are 63 this early Saturday morning —keeps growing.
  • If you have been using PayPal to fund your InTrade, TradeSports or BetFair account, please, check that horror story.
  • 48 hours after the launch of the “Prediction Markets” group at LinkedIn, we have already 52 members —both prediction market luminaries and simple people (trading the event derivatives or collecting the market-generated probabilities).

The Growth of Gambling and Prediction Markets: Economic and Financial Implications

Posted on by
Reply

No Gravatar

Bruke Hansen:

[…] The day concluded with three papers covering prediction markets, the first by Robin Hanson, the world&#8217-s leading proponent of prediction markets and former head of DARPA&#8217-s notorious &#8220-terror casino&#8221-. Robin Hanson – futarchist, cryogenic enthusiast, and all around Kool Aid-chugger – is the son of Baptist preacher, and he brings to the cause an eerie religiosity. A former physics student, Hanson admits that he got a PhD in economics so people would take his ideas seriously: truly a cart-before-the-horse moment. One of the original attacks on the &#8220-terror casino&#8221- was that the market was too thin not to be manipulated, and could steer policy in the wrong direction. So what would a true believer do? Of course, Hanson&#8217-s paper claimed that market manipulation actually makes markets more accurate, not less, by increasing the so-called &#8220-noise&#8221- of the market. Of course, like virtually all the presentations at the conference, this was concocted as nothing more than a laboratory experiment. Real statistics from futures exchange Intrade, for example – a conference sponsor, no less – were few and far between.

Totally unfair to Robin Hanson.

#1. Robin Hanson is indeed the world&#8217-s &#8220-reigning expert of the field of prediction markets&#8221-&#8230- FOR ALL THE GOOD REASONS NOT CITED BY THE REGISTER. See the Prediction Markets Timeline for more information.

#2. Robin Hanson is overly optimistic on his concept of &#8220-decision markets&#8221-, that is, complex conditional prediction markets used as a decision tool. Robin Hanson is wrong on the fact that there is a need for market-generated decisions, because the executives and politicians will never be willing to let a machine decide for them. That said, it&#8217-s not much of a problem because all Robin Hanson&#8217-s work on &#8220-decision markets&#8221- can be recycled for the &#8220-decision-aid markets&#8221-, that is, the step above the classic internal prediction markets that we know today.

#3. Yes, Robin Hanson can be out of whack sometimes, but, at the contrary, that&#8217-s a plus: Craziness and creativity go hand in hand. Nobody gives the first fig about what Robin Hanson does on his free time. What we see, in the field of prediction markets, is that he thinks outside the box, being an new institution designer, for the benefit of us all.

#4. The comment on the 2000–2003 US DoD&#8217-s DARPA&#8217-s IAO&#8217-s FutureMAP/Policy Analysis Market project is totally misinformed. The PAM project was sound. The only (very minor) valid criticism to make is that Robin Hanson insisted, wrongfully in my view, to focus on the Mid-East, where it&#8217-s well know that the American traders have few advanced indicators. Other than that, let&#8217-s not forget that PAM gave birth to a new technology, MSR, used today in three public prediction exchanges (Inkling Markets, WSX, and Media Predict) on top of being used at MicroSoft Research and by all Inkling&#8217-s clients.

#5. As a blogger, let me say that Robin Hanson is good material for me. I can sometimes laud his ideas, and at other times ridicule his ludicrous views. Sometimes, I&#8217-m wrong, and at other times, I may score a point against him. I don&#8217-t have this liberty with Justin Wolfers, for instance. The only thing I could criticize in Justin Wolfers was his Australian accent, but I got a boo from my audience for picking him as a target. :)

Previous: The Growth of Gambling and Prediction Markets: Economic and Financial Implications

NEXT: The truth on the 2000–2003 US DoD’s DARPA’s IAO’s FutureMAP/Policy Analysis Market project.

Michael Nutter wins Philadelphia mayoral primary.

Posted on by
Reply

No GravatarIowa Electronic Markets data. Very difficult to grasp &#8212-InTrade-TradeSports and BetFair are more usable. This IEM monopoly is a scandal.

WikiNews: Michael Nutter wins Philadelphia mayoral primary.

Previous blog posts by Chris F. Masse:

  • REBUTTAL: SalesForce, StarBucks and Dell demonstrate that enterprise prediction markets as intra-corporation communication tools (as opposed to forecasting tools) are overhyped by the prediction market software vendors and a little clique of uncritical courtisans.
  • Comments are often more interesting than the post that ignited them.
  • Harvard fella says prediction markets are doomed.
  • How should prediction market firms (e.g., InTrade-TradeSports, BetFair-TradeFair) deal with Blogosphere’s criticism?
  • BetFair’s future bet-matching logic
  • If Midas Oracle were to meet, would we use Huddle, and why?
  • WORLD’S SUCH A SMALL PLACE: Smarkets meet HubDub.

NPD releases April sales data, prediction market and analyst compared

Posted on by
Reply

No Gravatar

Last month was the first month the simExchange (the free to play video game stock market game) has traded monthly hybrid futures contracts to predict NPD US video game sales data. In this trial run, trading on the simExchange appeared to be relatively more accurate than expert predictions. To quickly review, the following table depicts actual sales as reported by NPD Group, the prediction by trading on the simExchange, the error of the simExchange&#8217-s forecast, the prediction by leading Wall Street firm Wedbush Morgan, and the error of Wedbush Morgan&#8217-s forecast:

US Hardware March 2007

ConsoleActual Sales*The simExchange**ErrorWedbush Morgan***Error
Nintendo DS508k492.8K-2.99%250K-50.79%
Nintendo Wii259k385.0K+48.65%400K+54.44%
Microsoft Xbox 360199k231.0K+16.08%250K+25.63%
Sony PlayStation Portable180K180.5K+0.28%210K+16.67%
Sony PlayStation 3130k144.0K+10.77%165k+26.92%

NPD has released its findings for US April 2007 video game sales. The following charts compare actual sales numbers determined by the NPD Group with forecasts from market trading on the simExchange and predictions by leading Wall Street analyst Michael Pachter of Wedbush Morgan.

US Hardware April 2007

RankConsoleActual Sales*The simExchange**ErrorWedbush Morgan****Error
1.Nintendo DS471k548.9K+16.54%450K-4.46%
2.Nintendo Wii360k319.5K-11.25%300K-16.67%
3.Sony PlayStation 2194kNot listedN/A250K+29.87%
4.Sony PlayStation Portable183K190.4K+4.04%200K+9.29%
5.Microsoft Xbox 360174k194.8K+11.95%175K+0.57%
6.Nintendo GameBoy Advance84kNot listedN/AN/AN/A
7.Sony PlayStation 382k107.3K+30.85%100k+21.95%
8.Nintendo GameCube13kNot listedN/AN/AN/A

The simExchange did not trade monthly hybrid futures for game software this month. However, NPD&#8217-s Top 10 is still relevant for comparing how trading on the simExchange is forecasting lifetime, global sales of the games.

RankTitlePublisherApril Sales*Lifetime Forecast**
1.Pokemon Diamond (DS)Nintendo1.045M18.21M
2.Pokemon Pearl (DS)Nintendo712K18.21M
3.Super Paper Mario (Wii)Nintendo352K1.83M
4.Wii Play w/remote (Wii)Nintendo249K4.90M
5.Guitar Hero 2 w/ guitar (Xbox 360)Activision197K1.30M
6.Guitar Hero 2 w/ guitar (PS2)Activision142KNot listed
7.Spider-Man 3 (Xbox 360)Activision117K1.07M
8.Spider-Man 3 (PS2)Activision105K1.62M
9.God of War II (PS2)Sony101K1.92M
10.MLB &#8216-07: The Show (PS2)Sony79KNot listed

Although data is still limited, initial predictions on the simExchange video game prediction market appear to be relatively accurate (compared with traditional predictors), and in some cases, absolutely accurate (compared with the actual result). The prediction market out performed the analyst on every prediction in March and was split in April.

Predictions on the simExchange should become more accurate over time as more accurate players are rewarded with more virtual currency for their accuracy (thereby enabling them to form more predictions) and less accurate players lose virtual currency (thereby discounting their ability to form more predictions).

Joining and playing the simExchange is completely free and does not involve any real money. To play, sign up here.

* NPD Group sales data
** The simExchange trading data
*** GameDaily Biz, April 13, 2007
**** GameDaily Biz, May 14, 2007

Cross posted from NPD releases April sales data, prediction market and analyst compared on the simExchange Official Blog.

Previously: Accounting sales of digitally downloaded games, Next lesson: so the “futures” aren’t really future, So what exactly are these “futures?”, The structure of the simExchange stocks and An invitation to join the simExchange beta.

The Sim Exchange and Midas Oracle both made it in CNET News.

Posted on by
4

No Gravatar

CNET News:

[…] It turned out that Shiau&#8217-s predictions weren&#8217-t perfect&#8211-on average he was about 15 percent off on the sales of Nintendo&#8217-s DS and Wii, Sony&#8217-s PlayStation 3 and PlayStation Portable and Microsoft&#8217-s Xbox 360. But he also wasn&#8217-t that far off predictions from Wedbush Morgan&#8217-s Michael Pachter, one of the most quoted industry analysts, who himself had been about 10.6 percent off sales on the same consoles. And a month earlier, Shiau&#8217-s predictions had actually been better than Pachter&#8217-s. Shiau had been off by about 15.8 percent, while Pachter had missed by 34.9 percent. […] &#8220-Brian Shiau seems to have created a nascent and vibrant community,&#8221- said Chris Masse, the author of Midas Oracle, a blog [*] about prediction markets. &#8220-(There&#8217-s) a strong emphasis on using the SimExchange as an educational tool to teach youngsters about the stock and futures mechanisms. I like this a lot.&#8221- […] &#8220-The biggest obstacle is that most people don&#8217-t know what a prediction market is,&#8221- said Shiau. &#8220-So it&#8217-s very difficult to pitch it to someone without them understanding how a stock market (provides useful information).&#8221-

Previous: NPD releases April sales data, prediction market and analyst compared – by Brian Shiau

[*] a group blog on prediction markets &#8211-&gt- 49 posters &#8211-&gt- 192 posts from the guest authors

Previous blog posts by Chris F. Masse:

  • VIDEO: Why Hillary Clinton will never be the Vice President of the United States of America.
  • Any idea what Brad Stewart means with that logo that features a south-to-north rotation? — Does he want to put our Planet Earth upside down? — The real rotation occurs around an axis that connects the north and the south poles.
  • Dick Morris (ex-strategist for Bill Clinton) devoted, not one, but two, strong columns against the Hillary-Clinton-as-VP scenario.
  • What InTrade, TradeSports, BetFair, TradeFair, Betdaq, NewsFutures, Inkling Markets, Reality Markets, and HubDub, should implement real quick.
  • Will we be able, one day, to trade our InTrade, TradeSports, BetFair and TradeFair event derivatives via our BlackBerry?
  • FACEBOOK AND LINKEDIN: How to deal with unwanted friend requests, the ethics of de-friending, and other social networking etiquette predicaments.
  • Don’t trade on the VP predictions markets. — Don’t bet on Hillary Clinton as VP. — Don’t listen to betting bloggers who tell you that Hillary Clinton has a chance to be on the Democratic ticket. — Don’t believe in “vice presidential selection committees”. — Select well your primary, advanced indicators. — Choose your bets carefully.

Meet Mark Davies, BetFairs Managing Director (Corporate Affairs).

Posted on by
Reply

No GravatarMark Davies, BetFair’s Managing Director (Corporate Affairs)

Mark Davies at LinkedIn

Previous blog posts by Chris F. Masse:

US DOJ searches financial records for traces of internet gambling and betting.

Posted on by
2

No Gravatar

INTERNET BETTING AND GAMBLING: CRISIS #23,765

&#8212-

Via Niall O&#8217-Connor of Betting Market, The Register&#8217-s Burke Hansen (a San Francisco attorney):

House of Cards. The American Department of Justice (DOJ) threw a spotlight on the murky underworld of internet gambling payment processing this afternoon with the indictment in Utah of seven individuals and four companies – including BetUs.com and serial violator BetonSports.com – involved with processing payments for online gambling transactions, according to the Associated Press. The indictment seeks to recover $150 million from the defendants under the Racketeering Influenced and Corrupt Organizations Act (RICO), in addition to hard assets such as real estate and property used in running the operations.

Ever since President Bush signed the Unlawful Internet Gambling and Enforcement Act (UIGEA) into law last October, internet gambling companies have been scrambling to process payments from frustrated American customers. […]

Although the UIGEA does not take effect until early July, major financial institutions pulled out of the American market almost immediately, forcing American gamblers and US–facing gambling suppliers to resort to increasingly roundabout methods of payment. […] Money laundering is just the disguising of the true nature of a financial transaction, and the convoluted payment systems allegedly developed by the defendants appear to qualify as that. […] Just how does the DOJ unravel these things? Although Tolman didn’t discuss that question, the DOJ most likely triangulates based on payment histories readily provided by American or foreign financial institutions. The DOJ could fairly quickly compare the payment history of a customer account formerly sending monthly payments directly to Bodog, for example, with more recent post-UIGEA history of the same account and guess with some accuracy where the gambling money now goes. […]

Frightening. :(

The Hollywood Stock Exchange in the news

Posted on by
Reply

No Gravatar

Rolling In The (Virtual) Dough – The Hollywood Stock Exchange Is Played By Gamers And Movie Lovers Alike – 2007-05-11

[…] With 25,000 hits a day, HSX is the Internet&#8217-s leading virtual market and a burgeoning source for big-studio market research. […]

Hmmmm&#8230- The Midas Oracle .ORG server web stats says this:

Analyzed requests from Fri, Sep 15 2006 at 8:23 AM to Thu, May 10 2007 at 12:37 AM (236.68 days).
Figures in parentheses refer to the 7-day period ending May 10 2007 at 4:47 AM.

Successful requests: 4,058,317 (208,537)
Average successful requests per day: 17,147 (29,790)
Successful requests for pages: 1,340,229 (59,991)
Average successful requests for pages per day: 5,662 (8,570)
Failed requests: 12,009 (2)
Redirected requests: 71,241 (225)
Data transferred: 51.59 gigabytes (2.39 gigabytes)
Average data transferred per day: 223.20 megabytes (349.99 megabytes)

The &#8220-hits&#8221- or &#8220-requests&#8221- are not what you should look for. If you have many images on your webpages, sure you&#8217-ll have a high number of &#8220-hits&#8221-. The &#8220-pageviews&#8221- count is what will give you info on users&#8217- behavior.

&#8212-

[…] But Anita Elberse, an assistant professor who teaches marketing at Harvard Business School, estimates that, on average, HSX closing prices come within 16 percent of box office receipts. […]

Congrats to Alex Costakis and Amy Lamare (and the HSX traders). :)

&#8212-

[…] Recently, the site has started to tinker with its 10-year-old formula. Once limited to MovieStocks, users can now purchase &#8220-Hollywood Derivatives&#8221- to predict the success of their favorite World Cup soccer team, American Idol contestant or Academy Awards nominee. (In 2005, HSX users correctly guessed all eight Oscar winners.) The point, says Costakis, is to create a &#8220-testing ground&#8221- for future additions to the site, which could include full-time sports options and TV stocks. […]

Looking forward to this. :)

&#8212-

Psstt&#8230- See what they say about the HSX leagues on the last page.

&#8212-

Bob Hahn turns the PETITION into a CONSENSUS.

Posted on by
6

No Gravatar

Bob Hahn turns lead into gold.

&#8212-

Via Google&#8217-s Bo Cowgill, Robert Hahn and Paul Tetlock&#8217-s Op-Ed in the Wall Street Journal (mirror at AEI-Brookings – mirror at AEI):

[…] These markets often predict more accurately than experts. Why? They draw on the knowledge of people who might otherwise be ignored. Their anonymity frees participants from pressures to agree with opinion leaders. And they create straightforward profit incentives that encourage participants to search for better information. […] A consensus plan, endorsed by more than 20 leading researchers, including Nobel economics laureates Kenneth Arrow, Daniel Kahneman, Thomas Schelling, and Vernon Smith, and published by the AEI-Brookings Joint Center, suggests the creation of a safe harbor for small-stakes, not-for-profit prediction markets to encourage experimentation. One could, for example, introduce exemptions for research-focused markets in which the size of individual investments does not exceed $2,000 per participant. The Commodity Futures Trading Commission (CFTC) could provide this safe harbor in the form of a &#8220-no-action&#8221- letter. Alternatively, the commission could create formal guidelines that make it cheaper and easier to start these markets. […] Prediction markets have become more than fodder for television news features on what those zany Internet folks will think of next. They are coming of age as serious tools for information gathering and analysis &#8212- tools with great potential for improving the efficiency of government and the productivity of industry. To help achieve that potential, Washington needs to nurture their development and keep them from becoming collateral damage in the endless war over who can gamble and where.

Step #1: Make some gullible economists sign a &#8220-petition&#8221-, entirely engineered by Bob Himself, and which is flawed and too timid.

Step #2: Make the gullible Wall Street Journal readers believe that a &#8220-no-action letter&#8221- is the solution, claiming that that&#8217-s the &#8220-consensus&#8221-.

Robin Hanson, who is at heart a free-gambling-for-all economist, took part of this pitiful farce. Bad judgment, doc. If Robin Hanson wants to stay the &#8220-reigning expert&#8221- of the field of prediction markets, he will have to mind a more pertinent industry analysis in the future. Viva Steve Levitt.

Previous: Steve Levitt of Freakonomics: I WON’T SIGN YOUR PETITION, BOB. + Chris Masse’s comment on the Freakonomics’ blog post about the legality of US prediction markets + Safe Harbor Letter too Timid – by Chris Hibbert + The limitations of logic (and the need for passion) – by Caveat Bettor + Jason Ruspini on the Economists’ Petition

Safe Harbor Letter too Timid

Posted on by
1

No Gravatar

This is an edited version of a post on pancrit.org commenting on the public letter advocating safe harbor for small-scale academic prediction markets. I can see why they limited their goals as they did, and I agree that everything they advocated should be legal, but I think they may have limited their objectives just enough to prevent any big wins.

One thing that Chris Masse seems to constantly argue is that Prediction Markets on dry subjects need to be accompanied by entertaining questions in order to to keep the audience&#8217-s attention. The economists had good reasons for shying away from recommending that sports betting should be included, but there are many other topics that diverse markets could include that give traders a reason to check back in. The range from the obvious entertainment questions (movie earnings and oscar winners) to legislative outcomes (bills passing and control of particular legislative bodies) and introduction and market success of new technologies. While these kinds of questions might be out of place on some single-topic markets modeled after the University of Iowa&#8217-s markets on elections, the internal corporate markets that they also mentioned often use them to help maintain interest. The letter&#8217-s recommendations that the CFTC &#8220-allow contracts that price an economically meaningful risk or uncertainty&#8221- unnecessarily limits the kinds of contracts that would be allowed.

Back on the side of supporting the letter&#8217-s authors again, I&#8217-d have to admit that if the CFTC or Congress acts to implement anything resembling the recommendation it would very likely increase Prediction Market activity greatly, and eventually lead to a broader acceptance. If the initial definition is too narrow, however, questions that don&#8217-t have clear economic implications (in the view of Congress and the regulators) might be stuck offshore for a long time to come.