The Efficacy Of Prediction Markets

The Liberty Papers ^ | November 8, 2007 | Brad Warbiany

[E. Pluribus Unum]

As I’ve pointed out, I’m a believer in prediction markets. For me, though, it’s more of an intuitive expectation that markets (i.e. revealed preference) are likely to be more accurate than stated preference. The question has come up with Doug, who isn’t yet a believer in prediction markets, as to whether there is any empirical evidence on how reliable prediction markets are.

So I went looking, and found a nice paper titled Interpreting Prediction Market Prices as Probabilities (PDF). I recommend following the link and reading the whole thing, but if you’re not interested, the first paragraph of the conclusion tells you what was discovered (emphasis added):

An old joke about academics suggests that we are often led to ask: “We know it works in practice, but does it work in theory?” This paper arguably follows that model. As discussed above, a variety of field evidence across several domains suggests that prediction market prices appear to be quite accurate predictors of probabilities. This paper suggests that this evidence is easily reconcilable with a theory in which traders have heterogeneous beliefs that are correct on average.

There are several concrete examples given, but as a football fan and occasional gambler, I know how difficult it is to predict football games. Last year, I tracked college games as if I were betting on the games, and against the spread I had a surprisingly good 62.5% record. That’s enough to beat Vegas, but the odd thing is that it was still only about an 80% record straight up picking winners and losers. So to read the below made me a believer in prediction markets:

For this reason we turn to two rather unique datasets. The first was provided to us by Probability Football, an advertising-supported free contest that requires players to estimate the probability of victory in every NFL game in a season.17 Including the pre-season and playoffs, this yields 259 games in the 2000 and 2001 seasons and 267 in 2002 and 2003. On average we observe the probability assessments of 1320 players in each game, for a total sample size of 1.4 million observations. Contestants are scored using a quadratic scoring rule; they receive 100 - 400(w - q)2, points where w is an indicator variable for whether the team wins and q is the stated probability assessment. Truthfully reporting probabilities yields the greatest expected points, a fact that is explicitly explained to contestants.

The top three players receive cash prizes. While these rank-order incentives potentially provide an incentive to add variance to one’s true beliefs, it turns out that given the number of games in a season, this incentive is small. For instance, in 2003, two mock entrants to this contest that simply used prices from TradeSports and the Sports Exchange (a sports-oriented play-money prediction market run by NewsFutures.com) as their probabilities placed seventh and ninth out of almost 2,000 entrants.

Such ideas are fairly simple. As a personal test, if any readers are in offices where you participate in weekly football pools, try a “system” of picking instead of your own intuition, and see how you do. For example, I’ve seen college pick’em pools where you assign a “confidence” rating to your picks for winners. A simple system would be to take the favorite in every game, and assign the confidence ratings to the teams in order of the largest spread to the smallest spread. You may not always have the best weeks, but I would postulate that over the season, you’re going to be in very good shape.

But the key here is that when you’re looking at various ways of determining probability, no method is 100% accurate. Prediction markets, though, have certain features that make them more likely to be accurate than many other “conventional” methods of evaluating probability, like polls. For that reason, and especially now that I have found empirical evidence to support my earlier intuition, I am more and more comfortable in my use of Intrade’s numbers over those of Gallup or Pew Research.

[Kevmo]

That’s what I like about this market as an indicator. Money talks.

Note that Fred is at 6%, so he could be a “bargain” but you might want to read why the Intrade crowd thinks he is at 6%.

Intrade forum discussion
http://bb.intrade.com/intradeForum/posts/list/1805.page

[Kevmo]

Plutarch posted this on another thread. I've never mastered getting graphs to work.

http://www.freerepublic.com/focus/f-news/1923437/posts?page=72#72

To: daylilly
People who participate in gambling in any form are not going to be conservatives IMHO. That isn’t anyone whose advice I care to hear. Intrade is worthless.
Intrade is worthless, eh? Yup, in 2006 the Republicans losing both House and Senate was trading at about 80% at worthless Intrade, while at FR only 7.4% correctly predicted the eventual outcome. You may not care to hear the advice of the those horrid gamblers, unless you want the most accurate prediction you can find.



http://aycu08.webshots.com/image/34127/2003512492726302557_rs.jpg

[graph]
72 posted on 11/09/2007 11:39:31 AM PST by Plutarch
[ Post Reply | Private Reply | To 51 | View Replies | Report Abuse ]

[Plutarch]

Ouch, that makes my eyes hurt. ;-)

How's this?:

[Kevmo]

Believe it or not, that's the first time I've posted an outside pic.

I don't count cutting & pasting from Blogthings...

You Are 4% Nerdy

You are definitely not nerdy - in fact, you probably don't know any nerds.
You probably care a little too much about your image. No one will know if you secretly watch Star Trek reruns!

How Nerdy Are You?

[Kevmo]

Bookies: Thompson Out, Rudy and Mitt Tops
The Street.com ^ | November 9, 2007 | Brett Arends

Posted on 11/10/2007 12:37:49 PM PST by Canticle_of_Deborah

http://www.freerepublic.com/focus/f-news/1923908/posts?page=27#27

To: HerrBlucher
You always spoil the fun of the anti-Freds.....:)
Oh, now Intrade is bogus. Show us your post dismissing the signicance of Intrade on this thread:

Fred Takes Lead on InTrade!
http://www.freerepublic.com/focus/f-bloggers/1842292/posts

Thought so. Fred doing well on Intrade = Intrade good. Fred tanking = Intrade bad.

27 posted on 11/10/2007 1:59:49 PM PST by Plutarch
[ Post Reply | Private Reply | To 22 | View Replies | Report Abuse ]

[Kevmo]

For the last few days I’ve been posting various intrade results side-by-side with polling data in the hopes of bringing attention that Hunter is slowly gaining traction and also that Thompson has been tanking on Intrade.

Petronski doesn’t like what I write, even though s(he) posted on the thread where Fred was leading on Intrade and also he says that Intrade is data. Petronski doesn’t like it so much that he calls me a liar, but he refuses to come onto this efficacy thread where it is properly discussed.

It is my contention that posting Intrade futures side-by-side with polling data as we go into the primaries is a very useful tool. Petronski calls it a lie. I will post one of the exchanges and a pointer to the thread so that readers can see for themselves. If it really is a lie, I am determined to correct it so that it reflects the truth.

http://www.freerepublic.com/focus/f-bloggers/1842292/posts

To: devere
Well, it’s interesting to see someone else posting Intrade results.

It’s a wide open race, might as well back the most conservative man.

According to Polls, Fred Thompson Foundering
http://www.freerepublic.com/focus/f-news/1925179/posts

Here’s what I’ve been posting lately.

Here’s a recent poll showing Hunter at 4%.

http://www.angus-reid.com/polls/view/28889/republicans_2008_giuliani_28_thompson_19

Here’s an intrade link to the forum site discussing how Hunter might be gaining traction.
http://bb.intrade.com/intradeForum/posts/list/1797.page

Here’s one showing Fred at 6%, and discussing why.
http://bb.intrade.com/intradeForum/posts/list/1805.page

One thing prediction markets are better at — their only bias is whether someone can make money trading the futures contracts.

The Efficacy Of Prediction Markets
The Liberty Papers ^ | November 8, 2007 | Brad Warbiany
http://www.freerepublic.com/focus/f-news/1922961/posts

Posted on 11/08/2007 12:21:43 PM PST by E. Pluribus Unum

Fred has lost ~30 points at Intrade over the last few weeks, looks like it’s stabilizing at ~6%.

Thompson Tanking in Futures Markets (Intrade, IEM)
Intrade; Iowa Electronic Markets ^ | October 31, 2008

http://www.freerepublic.com/focus/f-news/1919127/posts

The Dropout contract for Thompson has an ask price 2 points higher than last trade. There is no Dropout contract for Hunter.

http://www.intrade.com/jsp/intrade/contractSearch/

DROPOUT.DEC07.(F)THOMPSON
Fred Thompson to drop out of 2008 Presidential race on/before 31 Dec 2007 M 6.0 9.2 4.0 0 0

37 posted on 11/14/2007 6:53:53 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 25 | View Replies | Report Abuse ]

---

To: Kevmo
Here’s one showing Fred at 6%, and discussing why.
Still a lie.

38 posted on 11/14/2007 6:54:47 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 37 | View Replies | Report Abuse ]

---

To: Kevmo
Fred has lost ~30 points at Intrade over the last few weeks, looks like it’s stabilizing at ~6%.
Nope, still a lie. Not a percentage, just a futures price.

39 posted on 11/14/2007 6:55:55 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 37 | View Replies | Report Abuse ]

---

To: Petronski
Oh, cool, it’s Petronski coming in and bumping the thread with his nonsense. Or was that her nonsense? We never did clear that up. I checked today and Fred was at 6%, with an upward looking trend to 6.5 or so.

40 posted on 11/14/2007 6:57:04 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 38 | View Replies | Report Abuse ]

---

To: Petronski
Asked & answered yesterday.

http://www.freerepublic.com/focus/f-news/1925179/posts

41 posted on 11/14/2007 6:58:29 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 39 | View Replies | Report Abuse ]

---

To: Kevmo
Not a percentage. You’re lying trying to make Fred look bad. These are not polling percentages, they’re futures prices.

42 posted on 11/14/2007 6:58:39 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 40 | View Replies | Report Abuse ]

---

To: Kevmo
Asked & answered yesterday.
Yep, you were lying yesterday, were notified about it, and are still lying about it today.

43 posted on 11/14/2007 6:59:13 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 41 | View Replies | Report Abuse ]

To: Petronski
You’re right. Again. I think that must be the umpteenth time I’ve said that. They’re futures percentages, which have better predictor value than polling numbers. As you have been notified, and have chosen not to engage on the Efficacy thread, even though you chose to post on the thread where Fred once had the lead. That means you simply don’t like what Intrade has to say today, though you once liked what it had to say, and yesterday you called it DATA.

Thanks for bumping this thread.

Fred Takes Lead on InTrade!
http://www.freerepublic.com/focus/f-bloggers/1842292/posts

48 posted on 11/14/2007 7:08:31 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 42 | View Replies | Report Abuse ]

To: Petronski
Thanks for bumping the thread. Sorry you don’t like what Intrade has to say in terms of the data it points out to folks about your candidate.

53 posted on 11/14/2007 7:12:55 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 50 | View Replies | Report Abuse ]

---

To: Kevmo
Intrade doesn’t say what you claim it says. That’s your lie.

54 posted on 11/14/2007 7:13:53 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 53 | View Replies | Report Abuse ]

---

To: Petronski
It’s not a percentage, it’s a future price.
***Asked and answered on that other thread.

For the benefit of lurkers

http://www.intrade.com/jsp/tradesports/help/howitworks.html#tellmewhatthepricesmean

Tell me what the prices mean
Since our contracts trade between 0 and 100, you can think of the price at any time to be the percentage probability of that event occurring. Let’s go back to our George Bush example, on December 1, 2003 the George Bush re-election contract was trading at 63, meaning, traders gave him a 63% chance of being re-elected.

If you thought President Bush will be re-elected you would expect that price to go up - towards 100. In that case, if you bought one contract at 63 and Mr. Bush did get re-elected you would make the difference between your purchase price - 63 - and the closing price - 100 - or 37 points. How much profit would that be? Click here.

It’s important to realize that you don’t have to hold your contracts until the result of the event is decided - you can get out of your position at any time until the event is over. So if you change your mind about the outcome you can come back to the exchange, enter an order and close out your position, whether it’s for a profit or loss depends on you.

top of the page

Who determines the prices?

You do - along with thousands of traders around the world. Just like the price of Microsoft stock is determined by the buying & selling activities of thousands of traders in the financial markets, the price of our contracts are determined by traders, like you, who are confident enough to back up their opinion by risking real money.

top of the page

55 posted on 11/14/2007 7:14:49 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 52 | View Replies | Report Abuse ]

---

To: captnorb
This is the first time I’ve felt hopeful about our political process in fifty years. Maybe it really can work the way it’s supposed to, if we can keep these short-sighted ideologues from hogging the road and holding up traffic.

56 posted on 11/14/2007 7:15:00 PM PST by Eastbound
[ Post Reply | Private Reply | To 28 | View Replies | Report Abuse ]

---

To: Kevmo
Intrade doesn’t say what you claim it says. You’re misrepresenting the meaning of the numbers. That’s your lie.

57 posted on 11/14/2007 7:15:16 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 53 | View Replies | Report Abuse ]

To: Kevmo
I’m not bound to expose your lies on your little ‘efficacy thread.’ I’m going to point them out where you put them.

Intrade doesn’t say what you claim it says. You’re misrepresenting the meaning of the numbers. That’s your lie.

61 posted on 11/14/2007 7:16:55 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 59 | View Replies | Report Abuse ]

---

To: Kevmo
“you can think of the price as the percentage.”

It’s a price, not a percentage.

I’m not bound to expose your lies on your little ‘efficacy thread.’ I’m going to point them out where you put them.

Intrade doesn’t say what you claim it says. You’re misrepresenting the meaning of the numbers. That’s your lie.

62 posted on 11/14/2007 7:17:46 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 55 | View Replies | Report Abuse ]

---

To: Petronski
Asked & answered.

Thanks for bumping the thread.

63 posted on 11/14/2007 7:18:10 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 62 | View Replies | Report Abuse ]

---

To: Kevmo
I’m happy to call attention to your lies, here, where you’ve posted them.

Intrade doesn’t say what you claim it says. You’re misrepresenting the meaning of the numbers. That’s your lie.

64 posted on 11/14/2007 7:19:50 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 63 | View Replies | Report Abuse ]

---

To: Petronski
Asked & answered.

Thanks for bumping the thread.

65 posted on 11/14/2007 7:20:26 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 64 | View Replies | Report Abuse ]

---

To: Kevmo
I’m happy to call attention to your lies, here, where you’ve posted them.

Intrade doesn’t say what you claim it says. You’re misrepresenting the meaning of the numbers. That’s your lie.

66 posted on 11/14/2007 7:21:51 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 65 | View Replies | Report Abuse ]

---

To: Petronski
Asked & answered.

Thanks for bumping the thread.

67 posted on 11/14/2007 7:22:48 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 66 | View Replies | Report Abuse ]

---

To: Kevmo
OK. Buy a bunch of Fred futures.

Thank me when he wins and you’re rich. Split your profits with me 50/50.

68 posted on 11/14/2007 7:23:03 PM PST by RockinRight (Just because you’re pro-life and talk about God a lot doesn’t mean you’re a conservative.)
[ Post Reply | Private Reply | To 59 | View Replies | Report Abuse ]

---

To: Kevmo
I’m happy to keep your lies bumped. Exposes your deception.

69 posted on 11/14/2007 7:24:22 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 67 | View Replies | Report Abuse ]

---

To: RockinRight
I think Hunter is a better bargain. He currently polls at 4% and if Intrade started to track that you would get 40X return on your investment.

Fred, on the other hand, is the only candidate I know of who has lost ~30 points on Intrade. Probably not as good of a bet.

70 posted on 11/14/2007 7:24:45 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 68 | View Replies | Report Abuse ]

---

To: Petronski
Asked & answered.

Thanks for bumping the thread.

71 posted on 11/14/2007 7:25:12 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 69 | View Replies | Report Abuse ]

---

To: Kevmo
Intrade says what it says. People can see for themselves.
It says what it says, not what you claim. Happily, people can see through your lies.

72 posted on 11/14/2007 7:25:26 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 59 | View Replies | Report Abuse ]

---

To: Petronski
We can let them decide for themselves. Caveat subscriptor.

73 posted on 11/14/2007 7:26:14 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 72 | View Replies | Report Abuse ]

---

To: Kevmo
Be careful of the liar. He posts as Kevmo.

74 posted on 11/14/2007 7:27:02 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 73 | View Replies | Report Abuse ]

---

To: Petronski; devere
Oh, look. Someone else posting Intrade data. You might want to ping them. It’s 2 for the price of 1 day for stalkers.

http://www.freerepublic.com/focus/f-news/1925892/posts?page=37#25

75 posted on 11/14/2007 7:29:03 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 74 | View Replies | Report Abuse ]

To: Petronski
You misread this post. And I would leave it to the readers to decide whether your accusations were a result of some other misreading.

From my original post:
Here’s a recent poll showing Hunter at 4%.

http://www.angus-reid.com/polls/view/28889/republicans_2008_giuliani_28_thompson_19

That means Hunter polls at 4%. Hunter’s futures at Intrade, if they were at 4% would not be the kind of bargain I was talking about because you couldn’t get 40X return by tracking to the poll data.

Thanks for bumping the thread.

79 posted on 11/14/2007 7:48:10 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 77 | View Replies | Report Abuse ]

---

To: Charles Martel
You tell me, did Petronski misread post #70 or not?

If he/she misread that post, isn’t it a distinct possibility that he/she misread the other posts that gets their panties in a wad?

80 posted on 11/14/2007 7:50:31 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 78 | View Replies | Report Abuse ]

---

To: Petronski; kevkrom
Well, what a sucker I am!

The highly-predictive Intrade futures contract is valued at .1 (divide by ten and that’s a penny, folks), but Hunter Duncan actually DID poll at 4% in the notoriously inaccurate ARG, near as I can tell.

That’s the danger here. Fred is quoted at 6% (actually not a polling number, just a futures contract price, and definitely NOT a percentage) and Hunter is quoted at 4% (an actual, albeit shabby, poll) and an apples-to-oranges comparison misleads the reader.

That’s how good—and how dangerous—this lie is, it’s designed to deceive (to play a shell game between the two very different kind of data), and it works.

Let’s review:

Intrade futures contracts:

Fred about $6
Hunter $.1

Rasmussen daily polling:

Fred 12%
Hunter - too low to ascertain, 2% shared with others.

81 posted on 11/14/2007 7:51:06 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 77 | View Replies | Report Abuse ]

---

To: Kevmo
It’s all explained at #80.

I’m going to keep reposting that as long as you keep misrepresenting the numbers.

82 posted on 11/14/2007 7:52:00 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 79 | View Replies | Report Abuse ]

---

To: 2ndDivisionVet
What does Fred mean by ‘Secure our Borders’? Is he supporting the invisible fence border monitoring system or is he supporting the physical double border fence?

83 posted on 11/14/2007 7:59:47 PM PST by Calpernia (Hunters Rangers - Raising the Bar of Integrity http://www.barofintegrity.us)
[ Post Reply | Private Reply | To 1 | View Replies | Report Abuse ]

---

To: Petronski; kevkrom
That’s how good—and how dangerous—this lie is,
***Yup. What you just posted was either a lie or a mistake. You cc’d Kevkrom, not me. I’ve seen others do that in the hopes that the post would be overlooked.

I will let the readers decide for themselves.

It took you this long to actually start using the data. You said, “highly-predictive Intrade futures contract is valued at .1 “ which means that you consider it highly-predictive and good data. Now, I happen to not like the fact that Hunter is valued so low, but I’m posting Intrade results right & left because they are what they are. But you go around calling me a liar after you’ve posted on the thread where Fred was leading at Intrade and accepting the good news as good data.

http://www.freerepublic.com/focus/f-bloggers/1842292/posts

You and I went round & round on that other thread where it was agreed this was an apples-to-oranges comparison (metaphor put forth by me, not you) and I said it was reasonable as long as I called it fruit. Apples are apples, oranges are oranges, both are fruit. Polling data are polls, Intrade is futures contracts, and both are data.

I think our exchanges should prove educational on the efficacy thread so I think I will copy them over to there.

Thanks for bumping the thread.

84 posted on 11/14/2007 8:01:47 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 81 | View Replies | Report Abuse ]

[Petronski]

Twenty-five posts in six days? This thread is a graveyard for crickets, filled with tumbleweeds.

You’re splashing your lying comparisons all over the forum, that’s where I’m going to respond.

When you compare 4% for Hunter in the ARG poll to $6 in Intrade (and mislabel it a percentage), you are being deliberately misleading.

Intrade:
Hunter: .1
Fred: >$6

Rasmussen:
Hunter <2%
Fred: 12%

Leading people to believe the $6 contract price is a 6% poll result is a lie.

I am going to continue correcting you in this fashion as often as I can until you stop the misrepresentation.

[Kevmo]

From that other thread.

To: Kevmo
Tou said, “highly-predictive Intrade futures contract is valued at .1 “ which means that you consider it highly-predictive and good data.
No, it means I’m a sarcastic SOB.

Polling data are polls, Intrade is futures contracts, and both are data.

But they cannot be compared one to the other. Clearly labeling them.

Comparing Fred at 6% (not a percentage) to Hunter at 4% (a polling percentage) is a lie.

Either compare Intrade futures (.1 for Hunter, 6.x for Fred) or compare poll results (Fred at 11%, Hunter <2%)

Anything else is deceptive, and it has been made abundantly clear to you.

Apples are apples, oranges are oranges, both are fruit.

And in this case, intercomparing them is a lie.

86 posted on 11/14/2007 8:06:52 PM PST by Petronski (Willardcare abortions $50 each, $25 per twin. Ask for S&H Stamps!)
[ Post Reply | Private Reply | To 84 | View Replies | Report Abuse ]

---

To: Petronski
No, it means I’m a sarcastic SOB.
***Then that is a retraction? Are you going to retract what you said yesterday when you called it data? I posted much of our exchange over on the efficacy thread where this discussion belongs.

Since you seem to honestly believe that “intercomparing them is a lie”, I will post this over at the efficacy thread also. That’s where it belongs. This is an immigration thread.

91 posted on 11/14/2007 8:21:28 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 86 | View Replies | Report Abuse ]

[Petronski]

Of course, you didn’t copy this one:

***Then that is a retraction? Are you going to retract what you said yesterday when you called it data?

There’s nothing to retract. You can’t recognize sarcasm? Not my fault.

Of course it’s data, why would I deny it’s data?

It just doesn’t mean what you claim, in subtle ways designed to mislead. I’m not going to confine myself to your little slum thread when you’re spreading your misrepresentations all over the forum. Not as long as I’m here.

[Kevmo]

Feel free to suggest how this data should be presented, in such a manner as you would not consider it to be a lie.

[Petronski]

I should have deleted:

“Of course you didn’t copy this one.” This post belongs in both threads, but I put it here first.

[Kevmo]

It wasn’t there when I copied & pasted.

[Petronski]

#27.

If you’re listing Intrade data, it’s a dollar figure, not a percentage, and labeled as such (a price).

If you’re listing polling data, it’s a percentage, and labeled as polling data (a percentage, with source).

[Petronski]

Yes, my apology. I explained in #31.

[Kevmo]

OK, I have modified the post. Let me know if it needs further cleansing.

It’s a wide open race, might as well back the most conservative man.

According to Polls, Fred Thompson Foundering
http://www.freerepublic.com/focus/f-news/1925179/posts

Here’s what I’ve been posting lately.

Here’s a recent poll showing Hunter at 4%.

http://www.angus-reid.com/polls/view/28889/republicans_2008_giuliani_28_thompson_19

Here’s an intrade link to the forum site discussing how Hunter might be gaining traction.
http://bb.intrade.com/intradeForum/posts/list/1797.page

Here’s an intrade link to the forum site discussing how Fred is at $6, which corresponds to the traders believing he has a 6% chance of winning the nomination, and discussing why.
http://bb.intrade.com/intradeForum/posts/list/1805.page

One thing prediction markets are better at — their only bias is whether someone can make money trading the futures contracts.

The Efficacy Of Prediction Markets
The Liberty Papers ^ | November 8, 2007 | Brad Warbiany
http://www.freerepublic.com/focus/f-news/1922961/posts

Posted on 11/08/2007 12:21:43 PM PST by E. Pluribus Unum

Fred has lost ~30 points at Intrade over the last few weeks, looks like it’s stabilizing at ~6%.

Thompson Tanking in Futures Markets (Intrade, IEM)
Intrade; Iowa Electronic Markets ^ | October 31, 2008

http://www.freerepublic.com/focus/f-news/1919127/posts

The Dropout contract for Thompson has an ask price 2 points higher than last trade. There is no Dropout contract for Hunter.

http://www.intrade.com/jsp/intrade/contractSearch/

DROPOUT.DEC07.(F)THOMPSON
Fred Thompson to drop out of 2008 Presidential race on/before 31 Dec 2007 M 6.0 9.2 4.0 0 0

37 posted on 11/14/2007 6:53:53 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 25 | View Replies | Report Abuse ]

[Petronski]

We have not been communicating and it is my job to make myself understood, which I obviously haven't done. Sorry.

I'm laying here in the dark and I came up with an idea. We must be careful not to say Smith is bigger than Jones because Smith is 6ft. 2in. and Jones weighs 95kg.: two different measures, two kinds of units. Or Jackson is the better athlete because he can run a 9.8 100m dash, while Jameson can only throw the shot put 52ft. 2in. Again, two measures of athleticism, two kinds of units.

One of those athletes is better, one of those men is bigger, but the data (and the units) must be made to match. We'd have to ask, which man is faster? Which man throws further? Who is taller? Who is fatter?

That's all I meant to say.

[Kevmo]

That’s a lot different than calling someone a liar.

I’ll be proceeding forth with the post that I put up for your “peer review” as long as it meets the standard of not being a lie. I know you don’t like what it says, but that’s a different issue. But I will not knowingly move forward with lies. Inaccuracies and missteps, they happen all the time and I welcome corrections.

[Petronski]

Fair enough. Be well.

[Kevmo]

To: sevenbak; ellery
Interesting. What big issues has it been wrong on?
***I don’t know. Ellery had one example, I’m sure there are others. I’m hoping to see the data posted on the efficacy thread.

The Efficacy Of Prediction Markets
The Liberty Papers ^ | November 8, 2007 | Brad Warbiany
http://www.freerepublic.com/focus/f-news/1922961/posts

208 posted on 11/14/2007 11:10:52 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
[ Post Reply | Private Reply | To 207 | View Replies | Report Abuse ]

---

---

To: Kevmo; sevenbak
I’ve been digging — sorry, it’s taking me a while. The biggest problem is that I can’t find historical InTrade data online (at least for free) except in sporadic news reports. All the IEM data is online — Kevmo, in your experience does IEM track Intrade (a much bigger market) well enough for IEM to be a useful data set? Unfortunately, the IEM doesn’t have the state primary races — so it would be ideal if we could access historical Intrade data.

Another problem (at least as it relates to assessing this primary) is that we have data from only two similar, multiple-candidate primaries to evaluate (the GOP primary in 2000, and the donk primary in ‘04). Two-candidate general election races are much less complex and thus less pertinent to our current situation (’though still interesting).

Anyhoo, I’ve run across two instances so far where the prediction markets got it wrong. Caveat: it’s important to remember, as was noted in Kevmo’s research, that no one is claiming that prediction markets can tell us what’s going to happen. The issue is whether they are a better predictor than the polls. So, to fully evaluate the two instances below, we have to document what the polls said (i.e., were they even more off than Intrade?) In the first instance, the article says that the prediction market basically tracked the polls, so everyone got it wrong.

The biggest prediction market error was the dem primary run-up to the Iowa caucuses:

“Consider the Democratic caucus in Iowa. It is the first and most influential primary of the entire process, and it was the most anticipated primary of the season. There had been a solid year of campaigning leading up to it. The last three months were replete with intense local media coverage. If any prediction market should function correctly, this one was it.

“Well, right up until a few days before the primary, this market’s prediction was that Dean would win, and do so handily. Only he didn’t. Dean got crushed, and Kerry went on to be the nominee.”

http://www.thestreet.com/p/_rms/rmoney/barryritholtz/10185976.html

Another was from the general election in 2000:

“SM: The IEM predicted Bush would win the popular vote in 2000, which he didn’t. What went wrong?

“TR: IEM predicted about a two-thirds chance that he would win the popular vote, and Gore barely won. In our Winner-Takes-All market, we predict the probabilities of an event. In this case, it was either Bush or Gore taking the majority of the popular vote. When you predict the probability of an event, what you’re going to see is an outcome - either it happened or it didn’t. We predicted that there was a two-thirds chance that Bush would take the popular vote, but that means we also said there was a one-third chance that Gore would, and that’s what happened.”

http://www.smartmoney.com/theproshop/index.cfm?story=20041007

211 posted on 11/14/2007 11:38:38 PM PST by ellery (I don’t remember a constitutional amendment that gives you the right not to be identified-R.Giuliani)
[ Post Reply | Private Reply | To 208 | View Replies | Report Abuse ]

[Kevmo]

I posted a vanity about Duncan Hunter and Intrade, and Pistolshot brought up some points about efficacy so I’m copying the post here.

(vanity) Why the smart money is on Duncan Hunter
Self ^ | 11/11/07 | Kevmo

Posted on 11/15/2007 3:43:17 AM PST by Kevmo

http://www.freerepublic.com/focus/news/1926032/posts?page=54#54

To: Kevmo; All
Intrade depends solely on those who play and do not constitute the vast majority who have either no idea how or want to participate. It is too easily manipulated by a very few. It may reflect a possible outcome, but it flies in the face of other well known polling organizations.
Even though Duncan is an honorable man, his campaign has failed from the begining. It is honorable not to ‘need consultants, or have people do work for you, or write your own speeches’, but the downside is you are too busy doing the small stuff to concentrate on the major stuff, like RUNNING for POTUS.

When you run a NATIONAL campaign, the objective is to get your message out to the people, not just in specific localities, but NATION-wide. And that takes people, and a management that understands what a NATIONAL campaign entails.

To that end, his campaign management has failed their man, and those of you who cannot see that are fighting a losing cause, as noble as that is, it is still a lost cause.

I know that pains you and the responses will be what they always are, childish and delusional. You will respond with all the failings of every other candidate just to make your self feel better and your guy look good, but only to you.

There will be those who say... “it’s a conspiracy’....”the powers that be are not letting Duncan get his message out”......”the MSM is in cahoots with the Bush administration to muzzle Hunter” No matter that the MSM hates GWB, and there is no basis for them to even be in the same room.

The truth, as painful as it is, is still the truth.

When the NRTL endorsed FDT earlier this week, the Mitt fans, Duncan supporters, Huckabee promoters, and Rudy ravers had a complete breakdown on this forum. More inconsequential, minor-league obscure articles appeared to try and promote ‘your’ candidate.

Face it. The NRTL endorsement is one of the biggest chips to have on your side of the table in this high stakes game.

Next for Fred will be the NRA endorsement, with it’s 6-7 MILLION members. And that will be a very big chip, indeed.

54 posted on 11/15/2007 6:00:40 AM PST by Pistolshot (Never argue with stupid people, they just bring you down to their level and beat you with experience)
[ Post Reply | Private Reply | To 1 | View Replies | Report Abuse ]