Chris F. Masse offers his highlights of the past year in prediction markets. His list is long and informative. Go read it. I have a few quibbles:
Biggest Winner/Loser of 2004. I agree with Masse’s picks (Winner: TradeSports, Loser: NewsFutures), but not his focus on the U.S. presidential election. TradeSports became the premier service for placing non-sports real money bets (despite offering only a small number of semi-interesting contracts) and the authoratative citation for market odds. NewsFutures launched with a fair amount of hype but always struck me as less than serious.
Destined for Stardom and Most Under-Reported Story. Masse says HedgeStreet and their CFTC approval. Last month I glanced at their home price hedgelets, which seemed too short term (one quarter? — I’m interested in betting on housing market “fundamentals” but not on short term movements) and very thinly traded. I don’t know anything about the company, but I wish them well. They’re hiring software engineers. I wonder if successful use of information markets inside corporations during the last year will come to light. That would be my bet for both destiny and under-reported categories.
Biggest Waste of Money. Not Andrew Tanenbaum‘s supposed $3000 expenditure on setting up a poll tracking site. If Masse knows how to create a top 1000 website for less than $3000 I hope he lets us in on the secret. Prediction markets did outperform polls, though I suspect Masse’s motivation for this anti-award is dislike of Tanenbaum’s politics. By the way, Tanenbaum didn’t teach Linus Torvalds computer science, as Masse claims, though Tanenbaum did give Torvalds a virtual ‘F’ in a 1992 Usenet debate.
Best Idea of 2004. I think Wolfers’ and Zitzewitz’s idea is backwards. I don’t care much about how events influence elections (useful information for campaign consultants). I do care about how elections influence events (useful information for voters).
Masse’s prediction markets portal has scads of interesting links. Presently missing is zMarket: An Open-Source Platform for Developing Decentralized Markets, which could be an interesting development for 2005.