The Michigan GOP Showdown, at Caveat Bettor:
If McCain wins, then the contest will be called for Intrade. If either Romney, Huckabee, Paul, Giuliani or Thompson win, the contest will be called for Zogby. If any other candidate wins, a draw will be called.
The speakers’- presentations are now available in pdf format on the conference webpage,
http://people.ku.edu/~cigar/PMConf_2007.
I intend to keep this page in place, so feel free to bookmark it and use it as a resource.
Previous blog posts by Koleman Strumpf:
Pallavi Gogoi talks about “-predictive markets”- instead of prediction markets.
How dare. 
Previous blog posts by Chris F. Masse:
Knowledge @ Wharton (on polls):
The Power of Prediction Markets
The rapidly changing landscape of responders and related technology factors are two reasons why Justin Wolfers, Wharton professor of business and public policy, believes in the power of prediction, or betting, markets. Wolfers —- who is associated with several prediction market sites such as InTrade.com or Tradesports.com [*], where participants buy and sell contracts on sports and potential political outcomes —- argues that prediction markets are a more reliable outcome predictor than polls, for three reasons.
“-First, by forcing you to ‘-put your money where your mouth is,’- they yield truthful revelation of beliefs,”- Wolfers notes in a paper on pricing political risks with prediction markets. “-Second, markets provide profit opportunities for those willing to gather new information that helps predict the future. And third, markets aggregate information dispersed across many traders.”-
“-You are not asking who they will vote for, but who they think will win,”- says Wolfers. “-The evidence is overwhelming that prediction markets provide a more accurate prediction than polls. On average, the final forecast from a Gallup poll is within about 2.25 percentage points, and the average for prediction markets is 1.5 percentage points.”-
He points out that “-the idea of betting on presidential elections is not new at all. Betting on elections has been going on for the last 100 years. If you read The New York Times from the turn of the century [**], they will report what is in the prediction markets —- called ‘-betting markets’- back then —- and not polls, which hadn’-t yet been invented. But since 1940, the elections have been dominated by polls.”-
Wolfers predicts that “-within a few years and a couple of election cycles, we will be back to tracking political markets through the lens of prediction markets instead of polls. [***] In fact, in the last few election cycles, we have seen political commentators talking more and more about the race in light of prediction markets.”-
[*] What kind of association is it? I take it that it is an informal association. I have never seen anything written on the InTrade-TradeSports sites.
[**] Thanks to Paul Rhode and Koleman Strumpf. PDF file
[***] I would be more prudent. I’-d say that more and more commentators will follow the prediction markets, but the polls will remain the dominant barometer.
—-
UPDATE: Emile Servan-Schreiber (NewsFutures CEO) comments…-
1) The traders themselves are the first to look at the polls to inform their trades. So the polls are here to stay.
2) Our recent experience in Western Europe seems to indicate that the superior accuracy of markets over polls when predicting elections may be a U.S. artifact that isn’-t so easily reproducible elsewhere. I’-ve discussed this with Forrest Nelson of IEM [Iowa Electronic Markets], and apparently, ever since the Truman-Dewey polling debacle of 1948, U.S. pollsters have adopted a policy of reporting mostly raw numbers rather than projections based on sophisticated secret formulas, so they can’-t be accused of manipulating opinion. However, raw numbers are notoriously unreliable when based on small samples, and Western European pollsters never report them, preferring instead to publish projections based on historically-informed statistical formulas. What we’-ve observed in France and Holland is that it it’-s very hard to beat the accuracy of such projections.
Greg Newton:
The MacroShares are irretrievably broken. They have never performed as advertised. They show no signs of ever working as advertised. They are a disgrace to the ETF market, and have been, pretty much since they were introduced.
External Link: MACROshares
Author Profile -Editor and Publisher of Midas Oracle .ORG .NET .COM —- Chris Masse’-s mugshot —- Contact Chris Masse —- Chris Masse’-s LinkedIn profile —- Chris Masse’-s FaceBook profile —- Chris Masse’-s Google profile —- Sophia-Antipolis, France, E.U. Read more from this author…-
ABC News:
[…] Betfair can take bets from right around the country [Australia], but needs a change in law in states other than Tasmania – where it is already licensed – to enable it to advertise. Mr Twaits says the laws are invalid and are holding racing back.
“-Thoroughbred racing’-s share of the total gambling pie in Australia has dropped from 26 per cent in 1991-92 down to 8 per cent last year, and it’-s continuing to slide,”- he said. “-And the reason for that is that punters, or gamblers generally, are moving to low-margin products that have nothing to do with racing and racing doesn’-t earn a return from those forms of gambling. As a low-margin operator, what we offer racing is the chance to compete better with those non-racing low-margin operators and return a fair amount to the industry.”-
The NSW racing industry says Betfair does not return a fair amount to the industry, paying 24 cents per $100, compared to $1 from bookmakers and $4.50 from the TAB. But Mr Twaits says that is “-just plain wrong”-. “-We’-ve never put an offer to any racing industry official in the country that has been in those terms,”- he said. “-What we have offered to do is to pay a share of our gross revenue to the racing industry and a share of the gross revenue that we’-ve offered to pay is in line with what the TABs pay here in Australia. What matters is how much punters spend with wagering operators. So what they spend with us and what they spend with the TAB might be markedly different but if we agree to pay the same percentage of that spend to the racing industry then they should be happy with that.”-
Thanks to Niall O’-Connor for this interesting link.
A summary of the talks at last week’-s conferences is available here,
http://people.ku.edu/~cigar/PMConf_2007/PMConference_Notes.html.
Additional information will be posted in the near future.
Previous blog posts by Koleman Strumpf:
Some months ago, I noted that Betzip.com (since rechristened “-PurePlay.com”-) employs an intriguing legal hack to avoid anti-gambling regulations. It charges its customers a flat monthly fee, which qualifies them to win large prizes for winning online poker games. Non-paying customers can play the same games for free, too—though without qualifying for the largest prizes.
Why adopt that business model? Presumably, because it allows PurePlay to argue that it does not offer a gambling service. Specifically, PurePlay could claim that, because the amount players win has no relation to how much they stake, it dodges the “-consideration”- element of the legal definition of gambling. Query whether that claim would survive the devoted attentions of a prosecutor and court. I set that question aside, though, and here focus on PurePlay’-s claim that they have patented their business model.
Curious about the scope of PurePlay’-s patent, I searched its website for details. It offered none. I wrote to PurePlay asking for the patent’-s number. PurePlay refused to say. So I put my able research assistant, Mr. Sherwood Tung, on the case. He found PurePlay’-s patent, and more.
MMJK Inc., an entity located in San Francisco, California, owns PurePlay. It holds U.S. patent # 7,094,154. The Patentscope database of the World Intellectual Property Organization indicates that MMJK has also sought similar patent protection in many foreign countries. The patent’-s abstract reads thusly:
A computer networked, multi-user game system utilizing subscription based membership and alternative methods of entry, as well as the award of prizes of immediate value to the winner is described. A game tournament is hosted by a game server computer coupled to client computers operated by participating players. The games offered are games that involve elements of both skill and chance and require active player participation and decision making. A subscription-based membership is established for each player by charging a fee for a pre-determined membership time period. An alternative method of entry is provided to allow non-subscription players to participate in the tournament without payment of the fee. The non-subscribing players receive equal access to the games and at least the same chance of winning as the subscribing players, but are limited to a single entry per game or tournament. The game server hosts at least one game or tournament within the period, and players are potentially eliminated until a winning player and any runner-up players are determined. A prize pool is disbursed to the winning players in the form of cash, cash-equivalent notes, or prizes that have inherent and immediate value.
That of course offers only a shorthand description of the patent. You must carefully read its claims to know its actual scope. Or, I should say, its supposed scope- any patent can fall to a legal challenge, and business method patents prove especially susceptible to failing “-non-obvious”- inquiries.
[Crossposted to Agoraphilia and The Technology Liberation Front.]
Adam Siegel:
Two years ago the only way to run a prediction marketplace was to roll your own or call a vendor/consultant and have them set up software and run markets for you. It took many weeks, often months. Today with Inkling Markets it take seconds. […]
[#1] Improve forecasting of key performance indicators
Track and raise awareness of key success metrics to identify and mitigate risk factors before it’-s too late.[#2] Expose product quality problems early
Identify design and production anomalies before a product (physical or virtual) is brought to market to avoid expensive repairs and recalls.
[#3] Predict risk to your supply chain
Run a “-web”- of markets about the risk factors to your supply chain to predict internal and external events that would cause inefficiencies or disruptions.[#4] Foster a culture of innovation
Determine which new ideas and process improvements will have real business impact vs. the “-nice to have.”-
[#5] Create new interactions with users
Build a dedicated community of users around a marketplace of questions relevant to your business area and brand. […]
Previous blog posts by Chris F. Masse:
The Daily DOW prediction markets are thin, and the Daily Nasdaq prediction markets are inexistent.
Here is the data for yesterday.
DOW:
Nasdaq:
Previous blog posts by Chris F. Masse: