The Politics of Political Prediction Markets
For years, I have argued that the best way to track what really matters through election season is to follow the political prediction markets. The one difficulty is that these markets aren’t really available to the general public. Sure, the University of Iowa runs a market, but because it’s for research purposes, the maximum bet is set at only $500. And while I track InTrade closely, they’re based in Ireland, and are frowned upon by American regulators. Likewise, Betfair won’t deal with American customers. But all that may be about to change. Read More »
Predicting the Nobel Prize
Next Monday, the Nobel Prize Committee will announce the recipient(s) of the 2011 Nobel Prize in Economic Sciences. If you think you know who’s going to score this year’s prize, head on over to Harvard’s Nobel Pool, “the world’s most accurate prediction market.”
Each entry will cost you $1; all entries and bets must be received by 11:59 PM on Sunday, October 9th. If you’re looking for inspiration, past predictions can be found here. And if you haven’t already, listen to our Freakonomics Radio podcast, “The Folly of Predictions,” to find out where we stand on the whole notion of predictions.
So Freakonomics readers, who are you betting on?
Prediction Markets on the Debt Ceiling, U.S. Credit Downgrade
Over at Intrade, there are two “hot” markets involving the odds that Congress will raise the U.S. debt ceiling.
- Congress to approve increase in U.S. debt ceiling before midnight on July 31, 2011: 40% (It was 65% a month ago)
- Congress to approve increase in U.S. debt ceiling before midnight Aug. 31, 2011: 75% (It was 85% a month ago)
And at Irish bookmaker PaddyPower.com, here is the line on a Moody’s downgrade:
Will Moody’s downgrade the U.S.?
-Yes: 9/2
-No: 1/8
The Folly of Prediction
Season 1, Episode 4
Fact: Human beings love to predict the future.
Fact: Human beings are not very good at predicting the future.
Fact: Because the incentives to predict are quit imperfect — bad predictions are rarely punished — this situation is unlikely to change.
But wouldn’t it be nice if it did?
That is the gist of our latest hour-long special of Freakonomics Radio, called “The Folly of Prediction.” You can listen or download via the media player embedded inside the post, or read a transcript here. This program and four more hours are being broadcast on public-radio stations across the country this summer, and they’ll all wind up in our podcast stream in short course. See this map of where to find a public radio station near you that plays the show. And you can subscribe to the Freakonomics Radio podcast on iTunes or via RSS. Read More »
Newt’s Not the News: Prediction Markets Double Rick Perry’s Chances for GOP Nomination
OK, so Newt Gingrich’s senior staff have quit. But Newt’s not the news. At least according to the political prediction markets. The real news is that Texas Governor Rick Perry is likely to enter the Republican nomination race. The connection, of course, is that many of the staffers who quit have close ties to Governor Perry.
The figure below tells the story. (Click inside for graph). Since yesterday’s announcement, you can see the markets have re-evaluated Perry’s chances of winning the nomination from around 5%, up to 11%. There’s a tip here for newsgatherers: Focus on the details, and you’ll notice that the Perry’s prediction market rally began just after 11am. But the story broke three hours later, just before 3pm. Read More »
A Prediction Market Trading Pit for the Digital Age: A Guest Post From David Pennock
David Pennock is one of the smartest guys I know. As a scientist at Yahoo! Research, he’s on the bleeding edge of computer scientists working at the interface with economics. His latest project, called Predictalot, is an amazing new prediction market which allows people to trade on the millions of possible outcomes of the Sweet Sixteen. It’s a brilliant example of just why economists are going to have to get cozy with computer scientists. And David has generously agreed to provide a guest post describing what he’s up to. (And if you want more, he writes the always-interesting Oddhead Blog). Read More »
Middle East Despot Watch
I’ve been watching developments in the Middle East and Northern Africa closely. It can be hard to keep track of it all. Fortunately, the prediction markets at InTrade provide a useful barometer. Read More »
Witches to Be Held Accountable for Bad Predictions; Why Only Them?
In Romania, life has gotten even harder for practicing witches, as spelled out in a recent A.P. article: “A month after Romanian authorities began taxing them for their trade, the country’s soothsayers and fortune tellers are cursing a new bill that threatens fines or even prison if their predictions don’t come true.” Read More »
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