I agree that “we just don’t know enough about all this to make accurate assessments,” and so I hope the prediction markets keep offering these kinds of contracts and we have a chance to learn.

As you mentioned, a shortlist helps, a larger voting pool helps, visibility in the process and criteria helps, and the potential for leaks helps. Essentially we just don’t know enough about all this to make accurate assessments.

I’m not convinced that IOC falls into this same category. The group is large and the membership is public – over 100 members from all over the world. They are making a highly public and newsworthy decision, from an announced shortlist of possibilities.

I have to agree with you here, and particularly agree with the Sabernomics post. It appears from the voting patterns that Rio and Chicago were the strongest competitors, which was reflected in the percentages.

However, I do agree with Chris that the overall quality of a prediction market where information and decisions are made in a close-hold group will likely be low. I would include IOC voting, Supreme Court nominations (but not confirmations), cabinet secretary nominations (but not confirmations), etc. As with all probabilistic markets we need more observations to properly evaluate success, and by their nature these types are few and far between.

Fundamentally, these markets are inherently risky. But the market with a 45% chance of winning won. So Chris is (once again) making a mountain out of a molehill to drive traffic.

Speculative, sure, but some support in the voting record.

OneEyedMan: in principle you are right, but you can compare a series of markets against outcomes and if the prices are good, then things with prices around 10 should happen 10 percent of the time, etc. Hard to judge with relatively few outcomes to judge against.

Every time an option expires worthless that isn’t an indictment of markets, that a recognition that something can have a positive price even if it has no value in many states of the world.

Best Regards