Michael Giberson New in the Proceedings of the National Academy of Sciences, a paper showing how the “wisdom of crowd” effect can be undermined when members of the “crowd” are given information about what the rest of the crowd predicted. Averaged or full information about others’ predictions tended to narrow the diversity of predictions in … More “How Social Influence Can Undermine the Wisdom of Crowd Effect”
Michael Giberson Cornucopian views on resources are back in the news a bit due to John Tierney’s column at the New York Times in which he reports the settling of a wager on oil prices entered into in 2005 with oil industry analyst/peak oil proponent Matt Simmons. In brief, Simmons bet Tierney oil prices would … More Julian Simon and John Tierney Were Just Lucky, He Guesses
Michael Giberson At Constructive Economics, Abe Othman discusses a purported manipulation attempt in Intrade’s Health Care Reform bill market. The nut of the story is that early on March 17th a trader apparently poured a bit of money into the market, briefly driving the price from around 60 down to 35. After a few hours … More When Will Manipulation of Public Prediction Markets Begin to Work?
Michael Giberson Felix Salmon had an op-ed in New York Times on Hollywood’s opposition to the trading of future’s contracts based on box office receipts. Salmon said: In the 1950s, onion growers were often shocked at the low prices they were getting. Casting around for a villain to blame, they alighted on derivatives traders, and … More Onions and Motion Picture Box Office Receipts
Michael Giberson As just noted, the CFTC has approved Media Derivatives request to establish Trend Exchange, a box office futures exchange. At Midas Oracle, Chris Masse reacts to the news by drawing attention to remarks by CFTC commissioners suggesting that it may be difficult for Trend Exchange to gain the subsequent CFTC approvals needed for … More Will the Cftc Allow the Newly Approved Box Office Futures Exchange to Actually Offer Box Office Futures Contracts?
Michael Giberson Today the CFTC approved Media Derivatives Inc.’s request to create a futures exchange based on box office receipts. The exchange “is primarily focused on the development of a variety of products to benefit the entertainment industry with one if its initially proposed products being designed to help mitigate risk and enhance the successful … More CFTC Approves Box Office Futures Market
Michael Giberson Tyler Cowen links to a story in the New York Times detailing the opposition of the Motion Picture Association of America to two proposed markets for forecasting movie ticket sales. Of the objections noted in the article, Cowen thinks the key issue for Hollywood is the possibility of a poor market showing making … More Prediction Markets for Movie Box Office: Manipulation! Insider Trading! Efficiency! and Twitter!
Michael Giberson The IOC recently selected Rio de Janerio over three competing bids to host the 2016 summer Olympic games. The Chicago bid was favored in public prediction markets, with prices at Intrade between 50 and 60 at the time of decision and prices at Betfair implying about a 50 percent chance. Did the prediction … More Did Prediction Markets Miss the Call on Chicago’s Olympic Bid?
Michael Giberson Miriam Cherry and Robert Rogers explore the interaction of “Prediction Markets and the First Amendment.” If prediction markets are “expressive,” does that mean that U.S. government actions that constrain prediction market development potentially raise First Amendment issues on free speech grounds? The authors propose a way forward in which courts, at least until … More Does “Putting Your Money Where Your Mouth Is” Make Betting a Free Speech Issue?
At the prediction markets blog, Midas Oracle, Chris Masse has posted several times (here, here, and don’t miss the remarks in the comments) about the recent piece on prediction markets in The Economist. Among his recent grand pronouncements: If you are a prediction market consultant, and have nothing to say about the negative piece from … More Why is Chris Masse Making a Big Deal About a Little Article on Prediction Markets in The Economist?