Year in Prediction Markets

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.

[Via Tyler Cowen.]

11 Responses

  1. Thanks for your very smart comments. I’ve linked back to your webpage, so my readers can complement their reading. I’m an independent, a bit libertarian, thus leaning to the right, but I’ve high respect for some liberals, some progressives, and my favorite politician was Bob Graham (retired D-Fl.). So Tanenbaum is OK. What I want to do is bashing people who got their predictions wrong, and praising those who got it right. If you’re in the prediction field, there should be accountability. Now, am I the fairest judge? The idea was to spark a debate… I’ll link back to all the comments I’ll be aware of. Happy new year to all your readers.
    from the F country
    PS: Google alerted me only today about about the zMarket. Funny I intended to devote a great part of my website to open source application software regarding prediction markets, so you bet I’m interested!!!

  2. Chris, apologies for misreading you as a Bush fanboy. I certainly agree that getting predictions right deserves praise. But the U.S. presidential election winner is only one prediction. Would be interesting to compare various markets’ track records across multiple predictions.

    If you have a RSS feed for updates to your site please point it out.

    Happy new half decade!

  3. Hello Mike,

    #1. The US presidential election is the litmus test of any prediction exchange, and of the whole prediction markets field, in my view. 20 million bucks at stake, plus dozens more of free publicity in the Press (mostly by incompetent stenographers who republish PR releases, but this is another story).

    #2. That’s what I’ve just wrote to Chris Hibbert (the zMarket guy), I really need to install the RSS stuff. It’s such a mutant technology. I was not able to find a page that could explain it to an amateurish webmaster like me in “simple” terms. Can you think of any link of interest?

    Thanks for all the readers that you brought to my page. Who needs the search engines anymore now that we have the blogosphere?

  4. Bonjour Chris,

    Sure, if there has to be a single litmus test I agree the US presidential election is it.

    How you go about setting up a site feed is entirely dependent upon the software used to manage your site. Are you using any sort of “Content Management System” or are you simply copying HTML files to your server? If you’re using CMS/blog software, it probably supports RSS out of the box. Just figure out how to turn it on. If not you need to adopt such software or write a custom script that generates a feed based on file modification timestamps or similar.

  5. Thanks for your tip.

    I use NVu (.com) and yes I just copy the files to my web server.

    Hey, here’s a link I found:
    Content feeds with RSS 2.0

    By the way, neocon Donald Luskin has picked my webpage:


  6. If you can run php scripts on your webserver you (or a friend who barely knows php) could generate a feed in the manner I described above using RSSWriter.

    I read that Luskin is saying that you picked his page, not the other way round, though I suppose any time one links to a page one “picks” the page.

  7. Thanks for your interesting RSS tip.

  8. […] On the subject of punditry, i.e., predictions made without consequence for the predictor, Art Hutchinson has claimed over the past several months that use of internal prediction markets is on the upswing. I said so in January. :-) […]

  9. […] This prediction markets portal also has collected interesting links on the topic. Here is an informative blog post about recent prediction market attempts. Here is a scathing critique of some prediction […]

  10. […] price Hedgelets are still very thinly traded and only go out six months, a slight improvement over one quarter as of the beginning of this year. (Another complaint about HedgeStreet and to a lesser extent […]

  11. […] Year in Prediction Markets. None of the highlights matter 8 years later. Also see a previous refutation re what I did care about. […]

Leave a Reply