In part #2, he speaks about the books he is writing:
SXSW: Nate Silver explains how he approached political forecasting for the 2008 US presidential elections. – [VIDEO]
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Tag Archives: US presidential elections
Flawed New Hampshire polls = Non-accurate New Hampshire prediction markets
The most comprehensive analysis ever conducted of presidential primary polls:
Via Mister the Great Research Scientist David Pennock –-who is an indispensable element of the field of prediction markets.
As I blogged many times, prediction markets react to polls…- See the addendum below…- – [UPDATE: See also Jed’s comment.] – Prediction markets should not be hyped as crystal balls, but simply as an objective and continuous way to aggregate expectations. So, if you think of it, their social utility is much smaller than what the advocates of the “-idea futures”-, “-wisdom of crowds”- or “-collective intelligence”- concepts told us. Much, much, much, much smaller…- They all make the mistake to put accuracy forward. (By the way, somewhat related to that issue, please go reading the dialog between Robin Hanson and Emile Servan-Schreiber.)
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Addendum
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California Institute of Technology economist Charles Plott:
What you’-re doing is collecting bits and pieces of information and aggregating it so we can watch it and understand what people know. People picked this up and called it the “-wisdom of crowds”- and other things, but a lot of that is just hype.
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New Hampshire – The Democrats
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The Hillary Clinton event derivative was expired to 100.
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New Hampshire – The Republicans
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The John McCain event derivative was expired to 100.
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The definitive proof that HubDub is an indispensable prediction exchange. [*]
As I told you, I am blogging as often as possible on the other blog (Midas Oracle .COM) about the 2008 US presidential elections as seen thru the eyes of the prediction markets. As I wrote there this morning, I have just found out a truly interesting set of prediction markets at HubDub. (I wasn’-t able to find its equivalent on InTrade, BetFair, or NewsFutures.) It’-s trying to predict where the Dow Jones will be, come November 4, 2008. (As you may remember, the deeper the financial crisis, the more likely it is that Barack Obama will be elected president of the United States.)
As of this morning, the Dow Jones is barely above the 8,000 level (8,175.77), and the futures say that the stock market will rebound, at least in the first hours. However, I am bearish. I would bet that the Dow Jones will stay around the current level (or lower) until Election Day. In other words, I am betting on the red, on the chart below.
At what level will the Dow Jones Industrial Average close on Election Day?
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[*] And if Emile (whom we highly respect, overall) is pissed off by that statement, then, great, that’-s a cool unintended collateral consequence. 
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Are recent historical charts now useless for short-term prediction market analysis because of the non-informational trades made by that institutional investor hedging its political risks on InTrades election prediction markets?
How can you assess the impact of Colin Powell’-s endorsement of Barack Obama? You can’-t.
Are we witnessing manipulation attempts on the Florida prediction market at InTrade?
Florida went blue around 8:51 PM, on September 26, 2008…- for a brief period of time:
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The Democratic side:
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Tip via Lance Fortnow
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Previously:Is InTrade being manipulated?
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UPDATE: See Jason Ruspini’-s expert analysis in the comment area.
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2008 US Presidential and Congressional Elections Prediction: The Sarah Palin effect has partially evaporated, but its remains point to a close race, come Tuesday, November 4, 2008.
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#1. Explainer On Prediction Markets
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Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out…- Intelligence in, intelligence out…-
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 6 times out of 10, the favored outcome will occur- and 4 times out of 10, 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.
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More Info:
– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts
– Prediction Market Science
– The Midas Oracle Explainers On Prediction Markets
– All The Midas Oracle Explainers On Prediction Markets
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#2. Objective Probabilistic Predictions = Charts Of Prediction Markets
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Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.
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2008 US Elections
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InTrade
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2008 US Electoral College
2008 Electoral Map Prediction = InTrade – Electoral College Prediction Markets = Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade = electoralmarkets.com
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– This is a dynamic chart, which is up to date. Click on the image, and open the website in another browser tab to get the bigger version.
2008 US Elections Prediction: John McCain is now the favorite at InTrade, while all the other prediction exchanges still have Barack Obama ahead. Is InTrade quicker to incorporate the latest polls because of the bigger liquidity of its prediction markets?
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#1. Explainer On Prediction Markets
–
Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out…- Intelligence in, intelligence out…-
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 6 times out of 10, the favored outcome will occur- and 4 times out of 10, 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.
–
More Info:
– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts
– Prediction Market Science
– The Midas Oracle Explainers On Prediction Markets
– All The Midas Oracle Explainers On Prediction Markets
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#2. Probabilistic Predictions = Charts Of Prediction Markets
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Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.
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2008 US Elections
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InTrade
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2008 US Electoral College
2008 Electoral Map Prediction = InTrade – Electoral College Prediction Markets = Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade Ireland = electoralmarkets.com
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– This is a dynamic chart, which is up to date. Click on the image, and open the website in another browser tab to get the bigger version.
Intrade 2008.PRES.McCAIN > PRESIDENT.REP2008
How frequent are arbitrage opportunities such as the following?
In addition to title, the reverse is true of OBAMA/DEM.
Do traders really think there’-s some probability of McCain being elected as an idependent and Obama being replaced as the Democrat nominee?
Multi-millionaire, Republican, professor of economics Greg Mankiw uses Jason Ruspinis tax prediction markets at InTrade to assess the probability that a hypothetical John McCain presidency starting in 2009 assumes a raise in federal taxes.
Via Marginal Revolution
P(tax hike / McCain) = 74%.
APPENDIX: Robin Hanson does not know yet who he is going to vote for, in November 2008…- and feels that no scholar can help him.
2008 US ELECTORAL MAP PREDICTION: The 2008 US elections thru the prism of the prediction markets – 2008 US presidential and congressional elections – US President Prediction + US Congress Prediction – Barack Obama vs. John McCain
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#1. Explainer On Prediction Markets
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Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out…- Intelligence in, intelligence out…-
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 6 times out of 10, the favored outcome will occur- and 4 times out of 10, 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.
–
More Info:
– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts
– Prediction Market Science
– The Midas Oracle Explainers On Prediction Markets
– All The Midas Oracle Explainers On Prediction Markets
–
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#2. Probabilistic Predictions = Charts Of Prediction Markets
–
Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.
–
–
InTrade
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2008 US Electoral College
2008 Electoral Map Prediction = InTrade – Electoral College Prediction Markets = Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade Ireland = electoralmarkets.com
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– This is a dynamic chart, which is up to date. Click on the image, and open the website in another browser tab to get the bigger version.