Archives for prediction markets

What’s the Best Way to Predict American Idol?

I had a sobering moment a couple of years ago when I noticed that MSNBC’s recommendation engine predicted that I would enjoy stories about American Idol. It’s a guilty pleasure, but AI is one of the more normal things that I do with my 11-year-old daughter, Anna. So my household is quite happy that (fellow […] Read More »

Prediction Markets in Science

In a short piece in the latest Science journal, about the Promise of Prediction Markets, we provide a short review of the literature on prediction markets — how and why they work, and the accumulated empirical evidence. But our key point is public policy: Unfortunately, however, current federal and state laws limiting gambling create significant […] Read More »

Progress on Prediction Markets

One of the real barriers to widespread adoption of prediction markets by U.S. corporations has been a murky legal environment. Are prediction markets legitimate business tools, an alternative set of securities markets requiring SEC regulation, illegal betting markets, allowable games of skill, or something else altogether? Fortunately, the Commodity Futures Trading Commission is stepping up […] Read More »

Introducing the Freakonomics Prediction Center

We’ve blogged fairly regularly about prediction markets, so the next step would seem pretty logical: make our own. Enter the folks at Predictify (see the latest news here), who have been kind enough to create the official Freakonomics Prediction Center. It can be found in the right-hand column of our home page. We’ll post questions […] Read More »

Freakonomics in the Times Magazine: Bottom-Line Philanthropy

In their March 9, 2008, column in the Times Magazine, Dubner and Levitt ask: why can’t a charity be run more like a business? They look at two philanthropies that have adopted unorthodox business models. Smile Train, which performs free cleft-repair surgery for poor children around the world, started training local doctors rather than flying […] Read More »

Watching the Democratic Races

The political aficionados in Freakonomics Nation are probably doing the same thing that I’m doing right now — continually reloading the major news pages, in the hopes of finding some useful information. There won’t be any hard data for a few hours yet, and even then, it looks like there may be a long night […] Read More »

Prediction Markets at Google: A Guest Post

In my last post, I promised to say a bit more about prediction markets at Google. Google has been running internal prediction markets for a couple of years, and Eric Zitzewitz and I were fortunate enough to team up with Google whiz Bo Cowgill to analyze these markets. Ask any economist about the “theory of […] Read More »

Is Too Much Attention Paid to Small InTrade Contracts?

Harvard economist Greg Mankiw recently posted this chart depicting an InTrade contract on the probability of a U.S. recession in 2008, with the following commentary: In online betting, the probability of recession is now about two-thirds, compared to about one-half a few weeks ago. Evidence pointing toward a recession is certainly present, as Larry Summers […] Read More »