Feature proposal: FR Prediction Market (Vanity)

8/17/07 | me

[edsheppa]

There's a saying, opinions are like a-holes, everybody's got one. Ain't it true. Even here at FR there are vociferous posters on both sides of every issue. Often on all ten sides of an issue. Wouldn't it be great to know who's probably talking sense from the BSers? I think it would. And there's a way to do it, prediction markets.

There are a lot of them out there, and no doubt many FR posters participate in them. Many probably do quite well. But there's no way to tie their track record on those markets to their posted opinions on FR. I suggest that FreeRepublic have it's own home-grown prediction market, tied to registered posters' identities with public track records available. Then when a poster opines that Huckabee might overtake the field or it'll be Hillary and Obama or the DOW is headed for 1000 (or 100,000), you can tell whether to take him seriously with a quick check of his FR prediction record.

So, what say you all? Is it a good idea or bad? How might it be carried out?

[PreciousLiberty]

“You’re proposing taking out the fun from opinions.”

Not at all. In fact, such markets are more fun (and if real money is involved, more profitable).

Two examples of non-real-money, but interesting, futures exchanges are:

http://ppx.popsci.com/index.php
http://www.ideosphere.com

There are also real money exchanges for things like election predictions.

The neat thing about these futures exchanges is that they end up predicting the right outcome more often than any other method.

[Kevmo]

Prediction markets are starting to come into their own. I’m not sure it’s all that applicable to an opinion forum.

What I would hope for is a standard questionnaire that everyone could fill out and put on their FR homepage so that you can see where the person’s coming from. There’s a lot of absolutists that just enjoy arguing so they can wear you down.

[Antoninus]

I predict this initiative will fail.

Seriously, though, sounds like a neat idea.

[kinoxi]

Is there a prize if I'm right? Or just my eternal admiration.
;)

[edsheppa]

I predict that 99% of FReepers will say the republicans will win the next election.

Haha. But seriously, the contract would be more specific like Pres vs. Senate vs. House and I doubt what you say is true. That is, I bet it would be much lower than 99% who think, e.g., the Rs would take back the Senate.

[edsheppa]

I have no idea how you would keep track

I can see two issues. First, how to track your own positions on open contracts. Second, how to find the open contracts to bet on.

For the first, I imagine there'd be a table UI which would list the contracts you're betting on with an indication of the current "price" and whether it's changed To keep load off the servers, maybe some kind of client app talking to a web service that exposes the data would work.

For the second, usually these web sites organize the contracts by a taxonomy, e.g. politics vs. economics vs. sports and so on. You navigate the taxonomy to find contracts of interest. Metadata like that is also useful to answer questions about track records. For example, a poster might be very good at predicting political events but bad at economics.

[edsheppa]

You’re proposing taking out the fun from opinions.

I don't think that's true. Most opinions are about stuff that you can't really turn into a contract. But what is true is that a proven prediction track record lends weight to an opinion. And that's as it should be IMO.

The only people that are good with predictions are those with 20/20 hindsight.

I bet not, but if it were true, it would be very interesting to know.

[edsheppa]

if only Freepers were involved the market would be very thin

The current poll has about 3000 resgistered respondents. Looking back over the last several polls, 3000 isn't atypical. Is that really too few?

a Freeper sandbox could be created within their existing market.

Do you know of such a site?

[ßuddaßudd]

opinions are like a-holes, everybody's got one.
Is is acceptable to have that on ones FR homepage?

[Plutarch]

You could propose it to Intrade

Intrade might welcome a bolus of new participants.

They would need rig up a mechanism by which the performance of Freepers identifiable by screenames can be tracked separately from the rest of the Intrade traders.

Freepers are wildly optimistic prognosticators. Back in 2006, Intrade had an 80-90% prediction that the Democrats would take back both the House and the Senate. Freepers were having none of that. Only 7.2% predicted it.

This starry-eyed Freeper optimism can be seen in Presidential candidate choices. It is easy to find Freepers that think that Duncan Hunter has a chance, whereas at Intrade the chances of him winning the GOP nomination are 1000-1.