Prediction Markets in New Orleans: A Guest Post

Here’s the second installment from our newest guest poster, Justin Wolfers. His first post can be found here.

This weekend is the annual gabfest of the American Economic Association, running in New Orleans from Thursday through Sunday. It’s an econ-stravaganza, with dozens of parallel sessions running on just about every topic (the full program is here). For the past few years, Eric Zitzewitz and I have organized sessions around prediction markets (a recurrent theme on this blog). This year, we have assembled what I think may be the best panel to date:

1. Forrest Nelson, George Neumann, and Phil Polgreen will be presenting results from the Iowa Influenza Prediction Market. This is one of the most important public policy prediction markets so far, and it comes from the right folks — Nelson and Neumann are founders of the Iowa Electronic Markets, and Polgreen is one of the smartest epidemiologists you will ever meet. Their idea is fabulous — that doctors are the first to see signs of a flu outbreak — and their insight is terrific — that markets can help aggregate this disparate information. I’ve seen some of the early work from these guys, and it is very convincing, and a real step forward for epidemiology.

2. Paul Tetlock is an exciting young finance guy who was recently lured away from U.T. Austin by the Columbia Business School, and his paper, “Does Liquidity Affect Securities Market Efficiency?” arrives at the startling conclusion that more liquid markets on TradeSports.com are actually more likely to be inefficient, showing evidence of pricing anomalies such as the favorite-longshot bias.

3. Freakonomics will be represented with a paper from Steve Levitt, co-written with Ricard Gil, analyzing the TradeSports markets on the 2002 Soccer World Cup. In a previous posting, Levitt admitted that he was a bit slow bringing this paper to market, but I am particularly fond of it for a somewhat unrelated reason. I remember very clearly having lunch with Levitt in late 2002 when he was visiting Stanford, and he mentioned a fledgling Web site called TradeSports.com. I went back to my office, looked up this site, and within a few months, I had started writing furiously about prediction markets. I will be the discussant for this paper, so please feel free to leave suggestions for my discussion in the comments.

4. Finally, I’m really excited for a paper by Bo Cowgill, Zitzewitz, and myself that we will be debuting at this conference called “Using Prediction Markets to Track Information Flows: Evidence from Google.” I can’t say too much about the paper (yet), but I hope to describe it in a future post. Let me say that Zitzewitz and I are working with Cowgill, the Google whiz who set up an amazing set of prediction markets within Google. We use these prediction markets to track very precisely how information flows within the Googleplex and beyond. The three of us are optimistic that this may be one of the most far-reaching assessments yet of what can be learned from corporate prediction markets.

Meanwhile, Chris Masse gives his own prediction: “Good times will roll.”


CraigCunninghm

Hopefully, Steve can sneak out for some poker while he's there as well..

Anthony Trepanier

Prediction markets are a very good idea, but they do not seem to be catching on anywhere outside of economics blogs. Predictify.com doesn't seem to be catching on very well.

Johnny E

So what do all the economists in New Orleans say about the effect of a destroyed city on our economy? Can a free-market approach rebuild it in a reasonable amount of time or does the government need to take a more active role like providing direction? ie. where will it be safe to build?

Nigel Eccles

You are teasing us with the Google paper. As Anthony says prediction markets haven't really caught on outside of economics blogs. Is Google going to unleash their latent power?

Mike Giberson

Hey, that was my "good times will roll" prediction posted on Chris Masse's Midas Oracle group blog.

Wish I was there helping the prediction come true.

AC

This is some of the most interesting work going on in Economics today and the field should be lucky that a guy like Wolfers is leading the charge.

Diversity

Amy chance of getting people intersted in a predictions market (or a betting market) for climate change? My guesss is that the scientists are systematically under-calling the likely problems, and that the environmental campaigners are systematically over-calling; both for reasons of professional self-interest. A market should do much better than either.

Jonathan

There's a football prediction market yoonew.com that deals contracts for specific teams making the Super Bowl. If you check out their site, it has some detailed graphs of how teams' values are changing over the course of the season.

Paul Atwater

Regarding the Iowa Influenza Predictions Market, it is fire fighters (at least, Fire based EMS) that are the first to see signs of a flu outbreak - just ask the infected Medics from Toronto during SARS 1 and SARS 2. The Seattle Fire Department has developed a 'flu-like symptoms' tracking program accessible from the mobile computers on fire engines. After seeing a patient with flu-like symptoms who has called 911, fire fighters use a touch screen to indicate symptoms such as fever, cough, recent travel, etc... The data is geographically specific and is analyzed real-time. If any patterns emerge, local health authorities are notified.

maximsrimw

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Have been in the Crimea, Egypt, Turkey, Bulgaria. And once it is already beginning nadoedat.
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Tunisia - immediately discarded. Since far away and expensive. Yes, you can still bolyachek to pick up.

What has yet to find the original ... Polest decided on the Internet.
And found a site: http://casadaconfraria.com
It is proposed to relax at Villa in Portugal.
The idea is to moemomu - good. I'll try to relax this summer.
Later, the Tabernacle here impression.

Soccer-Euro

Goalkeeper Petr Cech has admitted his blunder that led to Turkey's second goal against his Czech Republic side was "a shock".

And the Chelsea stopper blamed himself for the 3-2 defeat after two late goals from Nihat Kahveci ensured the Turks progressed to the quarter-finals of the tournament ahead of the Czechs.

With his side leading 2-1 and only three minutes of normal time remaining, Cech fumbled a straightforward cross into the path of Nihat who bundled the ball home.

And then just two minutes later the same player found himself clean through on goal to net the winner.

Cech had no chance of stopping the late third goal, but said he would still take the blame for the defeat because he believed his error had resulted in his defenders losing concentration.

"When you make a mistake, you have to admit it. It was my mistake that decided that we have to go home," he told the BBC after the game.

"My mistake was such a shock for everyone. I think the third goal was a consequence of the second one.

"When I went for the cross I knew I was alone. I didn't want to punch it. I wanted to control it and then catch it at the second time but suddenly the ball was too far.

"I should have just punched the ball - I know that now."

Read more...

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Recently I discovered a rant on quite a respected figure in the tattoo community's Myspace. I say rant, it was more like pure venomous hatred.
It would seem that some find young people with visible ink, impatient and disrespectful, and they must all just think it's cool to have visible work.
I'm 23, My first tattoo was on my shoulder, then my wrists, then I got a full sleeve. Then I moved to my hands, then neck and I also have a large part of my leg tattooed.
It took me about two years to get the opportunity to get my hand tattooed by my idol, and then my neck by an artist I greatly admire, a lot of time, effort and thought was put into both of these.
Even though I'm somewhat older and do have a fair bit of coverage, I might still be classed as young and "under-tattooed" to have such visible work, and I can't help but think that's kinda crazy!
Sure I've seen some 18 year olds with kanji on their necks or poorly executed skulls on their hands, and you can almost tell they rushed into it, wanting everyone to see their new work as clearly as possible, and fine that to me is impatient and maybe even attention seeking.
Basically what I'm trying to say is that not everyone who has visible work is disrespectful to the art, some people invest a great deal of time, money and effort into getting that particular location inked with the highest standard work possible.
It's kinda funny to find prejudice within a community that tries so hard to divert it away from itself.

Thoughts?

Read more...

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