Tag Archives: prediction markets

Would InTrade or BetFair have done a better job predicting how many people would see the Barack Obama infomercial?

Posted on by
4

No Gravatar

As I disclose on the other blog (Midas Oracle .COM), the HubDub traders wrongly thought that the (Socialist) Barack Obama informercial would have be seen by &#8220-more than 50 million&#8221-. No, no, no, no. It was 33.5 million, according to Nielsen. The HubDub traders were too optimistic.

Would the InTrade or BetFair traders have done a better job? Jesus, that&#8217-s a difficult question. Which boils down (mainly, but not uniquely) to whether some experts on TV business were quoted in the media with some predictions. To investigate that, I have run a Google News search for news articles published before October 30. I haven&#8217-t seen any expert predicting how many viewers would get that infomercial. However, here&#8217-s what I spotted in the New York Times article published in the morning preceding the airing of that infomercial:

Ross Perot, the last presidential candidate to run similar programming, broadcast eight long infomercials to an average of 13 million viewers, with one of them getting 16.5 million viewers.

Hummm&#8230- Obviously, the HubDub traders were too cocky with their &#8220-50 million&#8221- figure&#8230- but should we blame them when, obviously (too), the Barack Obama situation circa 2008 is very different than the Ross Perot situation circa 1992?

The HubDub traders were not informed by the Ross Perot history. They simply made the bet that the Barack Obama infomercial would get as many TV viewers as the Third Presidential debate got (56.5 million). They predicted in a gregarious fashion. They lost.

I don&#8217-t think that the BetFair or InTrade traders would have done better. Do you?

–

How many people will watch Barack Obama&#8217-s primetime address on 10/29?

–


–

2008 US electoral college: What I am betting on.

Posted on by
Reply

No Gravatar

PollTrack:

–

I like the way they color this electoral college map &#8212-with 5 colors only (simplicity is good). It is very clear and usable, I believe. You can see 6 states in gray (&#8221-too close to call&#8221-). I am heavily betting on Barack Obama for Florida and North Carolina. There will be a good payoff, next Tuesday &#8212-maybe. :-D

–

Price for Alabama - Florida at intrade.com

–

Price for New Jersey - Rhode Island at intrade.com

–

Who will win Florida in the 2008 Presidential Election?

–

Who will win North Carolina in the 2008 Presidential Election?

–

–

Explainer On Prediction Markets

–

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 60 times out of 100, the favored outcome will occur- and 40 times out of 100, 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 &#8212-with or without an automated market maker.

Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that the traders bring when they agree on prices. These event derivative traders feed on the primary indicators (i.e., the primary sources of information), like the polls, for instance. (Garbage in, garbage out&#8230- Intelligence in, intelligence out&#8230-) Armed with these bits of information, the speculators then trade based on their anticipations, which will be either confirmed or infirmed. Hence, the prediction markets (which are more than just an information aggregation mechanism) are a meta forecasting tool.

The value of a set of prediction markets consists in the added accuracy that these prediction markets provide relative to the other forecasting mechanisms, times the value of accuracy in improved decisions, minus the cost of maintaining these prediction markets, relative to the cost of the other forecasting mechanisms. According to Robin Hanson, a highly accurate prediction market has little value if some other forecasting mechanism(s) can provide similar accuracy at a lower cost, or if very few substantial decisions are influenced by accurate forecasts on its topic.

–

More Info:

– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

–

More Charts Of Prediction Markets

–

At inception, I created an Internet usability category, and, since, I have published many Jakob Nielsen stories. Many wondered why I would bother. Now, the Midas Oracle readers can understand why.

Posted on by
2

No Gravatar

These traders are talking down the newly redesigned Hollywood Stock Exchange website.

–

–

[They guy above has misspelled, two times. He meant: “unusable“.]

–

–

Previously: #1 – #2 – #3 – #4

–

UPDATE: Traders talk on Twitter about HSX.

Thanks to the HubDub guy for the tip.

–

How to break a successful prediction exchange in less than one week

Posted on by
12

No Gravatar

Whiskey Kilo (a Hollywood Stock Exchange trader):

Change is one thing, breaking the whole site and acting like its nothing happened is another. The whole concept of trading movie stocks, movie bonds and options have taken a backseat to making sure you can blog, add friends, and “Schmooze”.

The old portfolio page was color coded and extremely easy to understand, you instantly knew if you were making H$ or losing your shirt. Now the current portfolio page is a small box, one colour, light grey on a white backround and the type is half the size of the font here, also you can only see 12 stocks at any given moment. Whoever OK’d this part of the site has to have never traded any shares online before.

From what I can gather, there was a beta version of this 3rd generation of the game, but no one paid any attention to the any of the feedback, two days after this new rollout, HSX.com started calling this new version a beta game, and what HSX staff there is say that portfolios are now their priority. However the only things that really work right now are the blogs, which pay H$10,000 a posting, adding friends pays traders H$1000, Online Polls, and Schmoozing. which paid initially H$1000, but now pays H$100 per reply. The only reason I see for paying traders to blog is to bring more eyeballs to the garish 728?90 and 300?225 ads on each page to pump the number of advertising views on HSX. But if this is part of the grand scheme here, I can’t see Gold coin or Forex advertisers closing sales from a bunch of 13 years because all the veteran traders have left in disgust.

I welcome Jed [*] to read the HSX Support page: http://www.hsx.com/cms/forums/support and look around, I shudder to think this all is going to be a B-School case study on how to kill a successful site in under a week.

–

[*] Jed Christiansen, who put up a comment in defense of HSX (Jed systematically defends the people I slam on Midas Oracle) &#8212-and who has just begun an MBA education.

–

Can InTrades prediction markets really contribute to solutions in avoiding future [financial] crises?

Posted on by
7

No Gravatar

The World Is Flat.

–

To the question asked in the title of this post, some have answered by the affirmative (&#8220-Prediction Markets Have a Big Role to Play&#8221-). In my view, it is wrong to overvalue the real social utility of the prediction markets.

As of today, we can plainly see 2 things. Number one, the prediction markets are a tool of curiosity. People have heard about InTrade thanks to numerous news articles (where some prediction market researchers who get the InTrade historical data for free pump up the prediction markets as God&#8217-s right arm on Earth). At crunch time, the people teased by all this publicity flock to the InTrade website to satisfy their curiosity about the state of the horse race. Number two, a subset of the general population (made up of educated people who believe in the virtues of markets) use the prediction markets as a tool of convenience. Instead of spending long hours reading the various outputs by the pollsters and the commentariat, these people just check InTrade on a daily basis, because they know that it is primarily (but not only) an information aggregation mechanism. InTrade sums up the news of the day, so to speak. Hence, these people (in the know about how to benefit practically from the wisdom of crowds) don&#8217-t have to spend time gathering and analyzing the news of the day.

To the question asked in the title of this post, I&#8217-ll answer &#8220-no&#8221- &#8212-unless one of my readers can educate me more about the following issues:

  1. Did InTrade set up a set of prediction markets, in the summer of 2008, aiming at forecasting the (then) &#8220-upcoming financial crisis&#8221-? I am afraid that the answer is &#8220-no&#8221-.
  2. Did the World Economic Forum (a.k.a. Davos) manage to open the eyes of the 2,500 so-called &#8220-global leaders&#8221- (a grandiose denomination that includes many of the Wall Street CEOs, and, yes, some financial bloggers like Felix Salmon, invited to that Swiss annual grand Mess of the capitalism) about the financial instability that was already perceptible in the recent years? I am afraid that the answer is &#8220-no&#8221-. Now, ask yourself: If Davos can&#8217-t, what makes John Delaney think that he can?
  3. Is there out there at least one expert (by &#8220-expert&#8221- I mean any professional other than the so-called prediction market experts who are expert in nothing else than pumping up the prediction markets) who can demonstrate clearly that the prediction markets in his/her vertical have helped tremendously in his/her pursuit of creating long standing wealth? I am afraid that the answer is &#8220-no&#8221-.
  4. How come nobody called bullshit on InTrade CEO&#8217-s grandiose statement?
  5. How come Jason Ruspini, usually so critical, has become as servile as a poodle?
  6. Is Robin Hason the only adult in the field of prediction markets?

–

I Told You So. - by Ed Miracle

I Told You So.

by Ed Miracle

–

The new Hollywood Stock Exchange website (recently redesigned) sucks as much as an indigestible fruit cake.

Posted on by
14

No Gravatar

HSX-sucks.com &#8212- I predict that somebody will soon register this domain name.

Many HSX event derivative traders have complained to me privately about the website redesign: they hate it more than they hate the recent financial bailout. One HSX trader went off on the Prediction Markets group discussion area at LinkedIn. Today, another HSX trader is writing a long prosecution of the HSX website redesign. Read it in all, and spot the many comments at the bottom, from fellow HSX traders.

The root of the problem is Alex Costakis &#8212-the director of HSX. My assessment of him is that he doesn&#8217-t get the Web. He is as clueless as a maggot trying to play Jazz. He is not an open person, and the Web is all about openness. This guy is a drag on HSX. I predict he will lead to HSX&#8217-s death.

The only 2 persons that could lead to a revival of HSX are Max Keiser or Nigel Eccles. Let&#8217-s hope that Cantor Fitzgerald will call them for help.

UPDATE: See the comments.

–

NewsFutures Election Contest – Actually Win Something

Posted on by
2

No Gravatar

Yesterday, NewsFutures launched a new contest on the US election, focusing on swing states. A way for us to beta test some new technology and some new UIs (this blogger/trader seems to like it so far.) As a reward, we&#8217-re offering X$5,000,000 to the best traders. That&#8217-s play money, but it&#8217-s significant play money: if you had X$5,000,000, you&#8217-d be ranked 21st on NewsFutures today, and you could trade your play money for a $100 Amazon Gift Certificate, not just bragging rights.

Check it out: http://vote08.newsfutures.com/vote08/index.html
It&#8217-s free, it&#8217-s fun, and you may actually win something

Is Spigit stealing the Best Buy quotes on enterprise prediction markets that does in fact belong to Consensus Point (which is the software vendor that has Best Buy as its customer)?

Posted on by
Reply

No Gravatar

Look at the quote at the bottom of this webpage.

UPDATE: They have just brought the Best Buy quote down. :-D