Category Archives: prediction markets

The Problem With InTrade

I recently withdrew money from an InTrade account I’ve had for some years. The total cost of withdrawing the money was $53.10: A $20 fee to InTrade for "processing the bank wire", a €10 ($13.10) wire-transfer fee to National Irish … Continue reading

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Tradesports, RIP

Tradesports, one of the most venerable real-money prediction markets, has closed. I’m not sure what this means for spin-off site InTrade, which recently increased the cost of withdrawing funds. But it can’t be good news, especially now that US election … Continue reading

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Chart of the Day: Palin on InTrade

Here’s today’s intraday chart of Sarah Palin’s contract at InTrade: this is meant to show the crowd’s wisdom on the question of whether she will be John McCain’s vice-presidential nominee. (The times are Irish, so they’re 5 hours ahead of … Continue reading

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Chart of the Day: The InTrade Electoral Map

Electoralmap.net puts the latest InTrade prices into graphical form: Looks like Florida alone isn’t remotely enough to get McCain into the White House. Update: Chris Masse points me to electoralmarkets.com, a sexy flash version of the above. Cool! (HT: Caveat … Continue reading

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Timing the Recession

Don Fishback and Barry Ritholtz are shocked — shocked! — that the InTrade recession contract is based on hard GDP numbers rather than, um, something else, maybe an NBER pronouncement the timing of which is entirely unknown. The fact is … Continue reading

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Prediction Markets: A Probability is not a Certainty

Mark Gongloff has a rather silly attack on prediction markets today. Let’s start at the beginning: John McCain’s presidential campaign is doomed — at least, if you still believe what political futures markets indicate. At the Irish electronic exchange Intrade, … Continue reading

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Spitzer’s Resignation Odds

The SPITZER.RESIGN.MAR08 contract at InTrade has been trading between 80 and 90 today, with the last trade at 85: essentially, the market is saying that there’s a 15% probability he won’t resign by the end of the month. Obviously, there … Continue reading

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Don’t Trust Prediction Markets in the Final Hours

After the polls closed in Texas last night, the DEM.TX.OBAMA contract on InTrade – the one judging his chances of winning the Texas primary – spiked up to 85, before embarking on a long and steady decline to zero. Clearly … Continue reading

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Dependent Variables in Political Prediction Markets

There’s a great example of the mathematics of dependent and independent variables over at InTrade right now. The betting company has just launched a CLINTON.LIFELINE contract, which reflects her chances of winning all three of the Ohio, Texas, and Pennsylvania … Continue reading

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Tilda Swinton: Upset of the Night

How did InTrade do at the Oscars? Pretty well, it turns out. All the favorites – anybody trading above say 65 – won in their category. Immediately before the announcements were made, No Country For Old Men was trading in … Continue reading

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Obama a Comfortable Favorite in Texas?

Over at InTrade, Hillary Clinton is tanking. Her chances of winning Ohio were 65% yesterday; that contract last traded at 47.5%. Meanwhile, her chances in Texas have plunged from 48% yesterday to just 30% now. The last time we saw … Continue reading

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Predicting Earthquakes

InTrade has just launched a new contract: The Exchange has listed a market on an earthquake of at least 9.0 on the Richter Scale ocurring anywwhere in the world in 2008… This contract will settle (expire) at 100 ($10.00) if … Continue reading

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Barack Obama Datapoint of the Day

The 2008.PRES.OBAMA contract last traded at 51 – which means that, at least according to InTrade, and as of right now, Barack Obama is probably going to be the next president of the United States. (HT: Mankiw)

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Wolfers on New Hampshire and Clemens

I had a long conversation about prediction markets and data-crunching with Justin Wolfers at the Money:Tech conference last week, which continued over the weekend via email. Given that we’re both bloggers, it seems time to bring the debate out into … Continue reading

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The Wisdom of Crowds, God Edition

In which we learn, er, nothing really: (Via Kirtland)

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Trading Recession Probabilities

According to InTrade, there’s a 58% chance that the US will see a recession in 2008. That number is higher than the 43% probability assigned to recession by economists polled by the WSJ. But there’s no real discrepancy there, says … Continue reading

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Was New Hampshire a Truly Historic Result?

Justin Wolfers is unapologetic in the wake of Hillary Clinton winning the New Hampshire primary. Clinton’s victory, he says, was "one of the most surprising upsets in U.S. political history": Election-eve trading had suggested that Sen. Obama had a 92% … Continue reading

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A Simple InTrade Arbitrage

While I’m on the subject of prediction markets, I might also add that they’re not even internally consistent, some of the time. Brian Weatherson has looked at arbitrage opportunities across markets, but they exist within markets as well. Here’s some … Continue reading

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Trading Obama and Clinton, Redux

Paul Krugman is right: prediction markets are looking pretty pathetic this morning. On Monday I noted that Obama had become the Democratic heir presumptive more or less overnight, saying that "the speed with which Clinton and Obama have traded places … Continue reading

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Trading Obama and Clinton

In April, Obama was Google and Clinton was General Electric. By Friday, Obama was the alternative-energy sector while Clinton was Citigroup. Today, we’re told that Obama is Apple, and Clinton is Dell. None of these metaphors are very useful, but … Continue reading

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My Predictions for 2008

Teresa, a loyal reader, writes: I was wondering, can you please post a blog with all your predictions for 2008? president? world series? best S&P sector? worst S&P sector? favorite stock pick for the year 2008? favorite dow 30 component … Continue reading

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The Future(s) of House Prices

The UK has a new tradeable derivatives contract on house prices, which shows house prices falling by 7% next year. That has Tim Harford worried: futures markets are "better than cheap-talk forecasts" in terms of being right, he says. But … Continue reading

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The Limitations of TradeSports

Last week, I wrote about the TradeSports contract on whether Alex Rodriguez would stay at the Yankees. It might be "a screaming buy," I said, but warned that it was very illiquid. So what has happened to the contract now … Continue reading

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The Electability of Al Gore

According to the most recent trades on InTrade, the chance of Al Gore running for president is 11%, the chance of his receiving the Democratic nomination is 6.4%, and the chance of his winning the presidency is 5.7%. Which means … Continue reading

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InTrade got the Economics Nobel Right

Barkley Rosser is unimpressed by the InTrade speculation about the winner of the Nobel Prize in Economics: The various betting markets on the Sveriges Riksbank Prize for Economics in Memory of Alfred Nobel, such as intrade.com, were just way off. … Continue reading

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