Wedding-Driven Markets

The engagement of Prince William and Kate Middleton has thrilled tabloid newspapers around the world, but the effects may be more far-reaching than you realize.

Caricaturing Economists

I was at the Legg Mason Thought Leader Forum last week, talking about my research over recent years on prediction markets. It was good fun, but the real novelty was that as I was speaking - literally, in real time - there was a cartoonist next to the stage, cartooning my talk on a five-foot-wide poster. I've never seen this before, but it was a real hit.

If You Can Bet on the Rain, Watch out for Rainmakers

A few days ago, the Chicago Mercantile Exchange began selling futures contracts on rain. As this Marketplace report points out, the Merc - best known for selling agricultural commodities and futures - "already sells futures for temperature, frost, snow - even hurricanes."

How to Become an Insta-Expert: A Confession

Using the prediction markets to become an insta-expert in just about anything.

Prediction Markets vs. Super Crunching: Which Can Better Predict How Justice Kennedy Will Vote?

One of the great unresolved questions of predictive analytics is trying to figure out when prediction markets will produce better predictions than good old-fashion mining of historic data. I think that there is fairly good evidence that either approach tends to beat the statistically unaided predictions of traditional experts.

Is It Time to Name This Recession?

As evidenced by this chart from the betting site Intrade, the probability of Slumdog Millionaire winning the Oscar for Best Picture has risen over the past two months right along with the probability that 2009 will be a year of recession (i.e., two negative quarters of G.D.P.): This correlation isn’t meaningful in any way. Lots […]

An Election Form Guide

Today, all eyes are on the U.S. presidential election. There’s certainly plenty to follow, and in my latest Wall Street Journal column, David Rothschild and I begin by highlighting the most interesting markets to track. The big one is obviously who will be the next president: Barack Obama‘s stock has risen in recent days, and […]

Presidential Prognostications

As the presidential race enters the home stretch, my most recent Wall Street Journal column assesses the likely outcomes. My conclusion probably comes as no surprise: “Barack Obama is the hot favorite to win.” I begin by noting that prediction markets currently rate Obama an 85 percent chance to win. But I think that these […]

Manipulation in Political Prediction Markets

My latest column in the W.S.J. assesses whether Intrade’s political prediction markets have been distorted by market manipulation: Over recent weeks we’ve observed a pattern of large orders for Sen. McCain on Intrade … executed at times when liquidity is particularly scarce. These orders have caused markets to shift sharply, often against the broader political […]

Picking the Next President: What Are the Odds?

My latest Wall Street Journal column about the election is titled “Making Sense of Disagreement.” I start with a simple question: who is the current favorite to win the election? Polls taken since the Palin pick have typically suggested that McCain is the new favorite. But sorting out an underlying trend from the usual convention […]