Formula One’-s Abu Dhabi Grand Prix in Yas Marina Circuit, Abu Dhabi, United Arab Emirates:
BetFair’-s favorite is Lewis Hamilton on McLaren-Mercedes.
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Bonus Track 
Ferrari World –- Ferrari theme park @ Abu Dhabi
UPDATE: FAIL.
I renew my call for boycotting the $400 vendor conference on prediction markets. Don’-t pay $400 to listen to prediction market software vendors. (They should pay you $400, rather, to listen to their marketese.) They highly exaggerate the usefulness of prediction markets (and enterprise prediction markets, in particular). They don’-t have a single use case to demonstrate their usefulness. There is no way you will get any R.O.I. out of those vendor conferences held in a phone booth.
Plus, the SF organizer of these conferences is a guy that has the detestable habit of hiding his identity under many pseudonyms (a female secretary, a “-legal assistant”-, a foundation director, etc.). This guy is a mythomaniac. Stay away.
Read Paul Hewitt’-s blog, instead. It is free —-and it tells the truth.
Both the bookmakers and the prection markets are utterly useless in trying to divine who will get the Nobel prize of economics.
Below is the 2009 prediction post-mortem:
1. Bookmakers
Ladbrokes’-s probabilities (odds) for the 2009 Nobel prize in economics:
Eugene Fama 2/1
Paul Romer 4/1
Ernst Fehr 6/1
Kenneth R. French 6/1
William Nordhaus 6/1
Robert Barro 7/1
Matthew J Rabin 8/1
Jean Tirole 9/1
Martin Weitzman 9/1
Chris Pissarides 10/1
Dale T Mortensen 10/1
Xavier Sala-i-Martin 10/1
Avinash Dixit 14/1
Jagdish N. Bhagwati 14/1
Robert Schiller [sic] 14/1
William Baumol 16/1
Martin S. Feldstein 20/1
Christopher Sims 25/1
Lars P. Hansen 25/1
Nancy Stokey 25/1
Peter A Diamond 25/1
Thomas J. Sargent 25/1
Dale Jorgenson 33/1
Paul Milgrom 33/1
Oliver Hart 40/1
Bengt R Holmstrom 50/1
Elhanan Helpman 50/1
Ellinor Ostrom 50/1
Gene M Grossman 50/1
Karl-Goran Maler 50/1
Oliver Williamson 50/1
Robert B Wilson 50/1
2. Betting Pools
Here is the betting in the Nobel pool at Harvard:
Robert Barro -10%
John Taylor –- 8%
Paul Milgrom –- 8%
Jean Tirole –- 6%
Oliver Williamson –- 6%
Martin Weitzman –- 6%
Eugene Fama –- 5%
Richard Thaler –- 5%
Lars Hansen –- 4%
Paul Romer –- 4%
3. Prediction Markets
Previously: Nobel Prize for Economics 2009 Predictions
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My dear honorable Eric Crampton,
Here’-s what I published about the “-Olympics in Chicago”- prediction markets:
Stay away from these markets where the intention is to divine the decision of a close, opaque group. It is impossible. No good information leaks out.
So, I did not say why you wrote. (I could sue your pants off for defamation. ) I understand that prediction markets have to fail sometimes to be right. But the prediction markets on the Olympics in Chicago are just like playing the lottery. Nobody knows anything. No good information aggregation is possible since no good information is leaking out.
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I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.
If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.
I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.
Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.
The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.
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Previously: Chicago wona€™t have the Olympics in 2016.
ADDENDUM:
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
I think the a€?small, secretive committeea€? explanation is weak [].
Bradbury does an excellent job sifting through the shifting coalitions revealed in the three rounds of IOC voting. Neither Madrid nor Toyko showed any significant ability to attract votes as the rounds proceeded. It was going to be Rio or Chicago all along, but Chicago was weakest in the four-way vote and lost early, leaving the games to go to Brazil.
Based on Bradburya€™s [analysis], Ia€™m convinced that the decision was pretty much a toss up between Chicago and Rio. That conclusion was also implied in the prediction market prices just before the decision. Sure, the prediction markets favored Chicago, slightly, over Rio- I dona€™t think you can call it a miss given the closeness of the decision.
Well:
Previously: Chicago wona€™t have the Olympics in 2016.
ADDENDUM:
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
The blogger at Sabernomics sees “-this as a win for prediction markets, not a failure.”-
I don’-t share his views, but I wanted to link to his piece for you to make up your own mind about the issue.
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Prof Michael Giberson,
No “-careful observer knew this in advance”- (about Chicago being a lemon), for the simple reason that if they knew, they would have downgraded Chicago on the InTrade and BetFair prediction markets, and Ben Shannon would have not bet $6,000 on Chicago.
I look forward to your contrite correction on the frontpage of Knowledge Problem —-in bold, and with a link to Midas Oracle, stating that “-Midas Oracle is the only website in the world to have told you *not* to bet on Chicago a€”and to stay (far) away from any Olympics venue prediction market.”-
My thesis holds: The International Olympic Committee (IOC) is a close aristocratic group that does not leak out good information.
Previously: Chicago wona€™t have the Olympics in 2016.
ADDENDUM:
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
Chris, isna€™t it odd for you to state a€?Chicago had not the slightest chance to begin with.a€? The phrase implies you believe that the probability of Chicagoa€™s selection was near zero all along, but you have been claiming that it is impossible to predict anything about the outcomes of IOC selection processes.
Also, the NYT article reports on backbiting and disarray at the USOC. While the article is published after the IOC decision, presumably any careful observer knew this in advance [*] and you are suggesting it was relevant to the outcomes of the IOC market, i.e. you are suggesting it is a reason to have believed the Chicago selection as particularly unlikely. Again, this suggestion is contrary to your earlier views suggesting IOC decisions are unpredictable because there is no good information to aggregate.
I look forward to your correction!
[*] You presume too much, doc.
If, as you said quite cockily, “-any careful observer knew this in advance“-, then the (mass or vertical) media would have reported about that, and, logically:
The proof is in the pudding, doc.
You are wrong and I am right.
