Considering that he is the #2 researcher in our field, that he issued bold statements on the use of market-generated predictions by journalists (”-2020″-), that the WSJ is the premier business publication, then that’-s bad omen for prediction market journalism —-well, at least, for the version that he has put out. The feedback of the Blogosphere is clear: WE COULDN’-T CARE LESS.
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JW + WSJ
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Marc Groz of Topos Capital graciously invited me to deliver a guest lecture to his class at NYU last Wednesday. The talk, “-Measured Enthusiasm for Prediction Markets“-, was given to about 20 students, some with significant market experience. It introduced real money prediction and decision markets, then went off into tax and policy markets. As the title suggests, there wasn’-t an evangelical focus, but I hope to have excited a few students about this new frontier. The presentation includes a couple of scenarios that I have not seen discussed yet in the usual places.
Cross-Posted from RM&-P
Robin Hanson in a comment, over there.
See also that question for Mike “-Barbecue”- Giberson.
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Ah, Kansas…- Barbecues, pickup trucks, rednecks, country music, and…- the local FOX News.
Despite that one blip on the radar [New Hampshire], Strumpf said futures are still the best way to predict the way things will go from here.
Spot the SIDEBAR (which is not located on the sidebar, actually), and click on the little square, just below “-video”-, to watch the report.
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BOTH.
But, contrary to what Lucy Berholtz thinks, the former will go further than the latter —-in my view.
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My thoughts about the Financial Times article on Bet2Give:
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Share:
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Robin Hanson on “-silly”- research topics:
[M]ost people think futarchy (government by [prediction] markets) is silly, even though most think it has a decent chance of performing well […].
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Decision markets and decision-aid markets are 2 great concepts pushed by Robin Hanson, the world’-s #1 researcher in the field of prediction markets. But they are just inventions, not innovations. What is important is to find out which population segment or which class of business executives find this stuff productive and helpful.
In that perspective, his presidential prediction markets at InTrade are good ideas, and the liquidity there (helped by an AMM) is decent enough. But they are just betting supports, right now. I haven’-t seen any opinion leaders taking them as a trusted source of information, which is the damn goal. We will see whether that comes true in the future.
If Robin Hanson were really serious in finding a killer app for his concept of decision-aid markets, he would of course come up with conditional prediction markets in the realm of sports, which is the most popular topic in the real-money prediction markets. Alas, I often have the impression that the academics in the field of prediction markets have profound disdain for sports prediction markets.
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Robin Hanson on seeking decision advice:
[…] We rarely seek out advice, and when we do it is usually on much smaller decisions. […] One reason we avoid getting advice is that it lowers our status relative to those who give advice. Of course this is also makes asking for advice a good way to flatter and supplicate. Not sure if this explains the puzzle though. But all this doesn’-t seem to bode well for fielding decision markets on the biggest organizational decisions.
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Allow me to digress from there. I think that the reading from the prediction markets is like an advice —-in that you have to accept the market message as an authority. If you are an expert with direct access to primary sources of information, I don’-t think you’-d rely on the message from the public prediction markets (which are information aggregation laggards). The big mistake from Robin Hanson and the others has been to sell the public prediction markets as tools for the decision makers. That could happen, but marginally, I believe. Experts and decision makers will firstly want to rely on their primary sources of information and on their analysis.
I think that the population segment which is the more likely to appreciate the consumption of market-generated probabilities would be composed of people who want a chopper view of world events. Prediction market journalism should satisfy this dashboard need.
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[Please note that the thoughts expressed above refer to the public prediction markets (as stated in the post title –think BetFair-TradeFair, InTrade-TradeSports, Betdaq, HubDub, NewsFutures, and Hollywood Stock Exchange) —not the enterprise prediction markets, which is a horse of another color.]
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Robin Hanson on decision-aid markets:
I don’-t recall ever turning down a chance to consult on prediction markets for a Fortune-500 company. If you know of an opportunity that I’-m missing, do let me know.
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Doc, are there more Fortune-500 executives and managers attending a conference on extra-terrestrials or a conference on finance? 
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Alas, that paper is not free to access.
Andrew McAfee’-s post reveals this:
Prediction markets were (sic) very much like stock markets. They contained securities, each of which had a price. […-]
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Not sure why they used the past tense.
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Prediction markets are in fact event derivative markets.
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Papers from Robin Hanson, Justin Wolfers, Eric Zitzewitz, Koleman Strumpf, etc., are free to download.
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Via George Tziralis, of Ask Markets.
Previously: Do Google’s enterprise prediction markets work?
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Previous blog posts by Chris F. Masse:
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Unlike InTrade and NewsFutures, BetFair does not deliver any chart after that the prediction market has expired —-leaving the blog post that linked to it totally blank (in a digital world where old content is King, and where Google sends traffic to old blog posts).
The BetFair marketing department is staffed by arrogant incompetents who are incapable of establishing a working relationship with prediction market bloggers like me.
There is nothing more important for our industry than the uprising of new blogs that would hot-link to the charts of prediction markets. The BetFair marketing team hasn’-t computed that yet, in spite of all efforts made in their direction.
Of all the prediction market firms I talk with, BetFair is the most impermeable to the prediction market approach: their degree of arrogance is inversely proportional to their level of competency.
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Emile’-s made up a phrase that means nothing (except in his fertile imagination), “-a proprietary prediction market variant“- —-sounds like a red herring to me.
Unlike Consensus Point, Inkling Markets and Xpree, NewsFutures is the only prediction market software vendor not to have adopted Robin Hanson’-s MSR —-a simplified trading technology now in use in most enterprise prediction markets.
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