To: sevenbak; ellery
Interesting. What big issues has it been wrong on?
***I don’t know. Ellery had one example, I’m sure there are others. I’m hoping to see the data posted on the efficacy thread.
The Efficacy Of Prediction Markets
The Liberty Papers ^ | November 8, 2007 | Brad Warbiany
http://www.freerepublic.com/focus/f-news/1922961/posts
208 posted on 11/14/2007 11:10:52 PM PST by Kevmo (We should withdraw from Iraq — via Tehran. And Duncan Hunter is just the man to get that job done.)
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To: Kevmo; sevenbak
I’ve been digging — sorry, it’s taking me a while. The biggest problem is that I can’t find historical InTrade data online (at least for free) except in sporadic news reports. All the IEM data is online — Kevmo, in your experience does IEM track Intrade (a much bigger market) well enough for IEM to be a useful data set? Unfortunately, the IEM doesn’t have the state primary races — so it would be ideal if we could access historical Intrade data.
Another problem (at least as it relates to assessing this primary) is that we have data from only two similar, multiple-candidate primaries to evaluate (the GOP primary in 2000, and the donk primary in ‘04). Two-candidate general election races are much less complex and thus less pertinent to our current situation (’though still interesting).
Anyhoo, I’ve run across two instances so far where the prediction markets got it wrong. Caveat: it’s important to remember, as was noted in Kevmo’s research, that no one is claiming that prediction markets can tell us what’s going to happen. The issue is whether they are a better predictor than the polls. So, to fully evaluate the two instances below, we have to document what the polls said (i.e., were they even more off than Intrade?) In the first instance, the article says that the prediction market basically tracked the polls, so everyone got it wrong.
The biggest prediction market error was the dem primary run-up to the Iowa caucuses:
“Consider the Democratic caucus in Iowa. It is the first and most influential primary of the entire process, and it was the most anticipated primary of the season. There had been a solid year of campaigning leading up to it. The last three months were replete with intense local media coverage. If any prediction market should function correctly, this one was it.
“Well, right up until a few days before the primary, this market’s prediction was that Dean would win, and do so handily. Only he didn’t. Dean got crushed, and Kerry went on to be the nominee.”
http://www.thestreet.com/p/_rms/rmoney/barryritholtz/10185976.html
Another was from the general election in 2000:
“SM: The IEM predicted Bush would win the popular vote in 2000, which he didn’t. What went wrong?
“TR: IEM predicted about a two-thirds chance that he would win the popular vote, and Gore barely won. In our Winner-Takes-All market, we predict the probabilities of an event. In this case, it was either Bush or Gore taking the majority of the popular vote. When you predict the probability of an event, what you’re going to see is an outcome - either it happened or it didn’t. We predicted that there was a two-thirds chance that Bush would take the popular vote, but that means we also said there was a one-third chance that Gore would, and that’s what happened.”
http://www.smartmoney.com/theproshop/index.cfm?story=20041007
211 posted on 11/14/2007 11:38:38 PM PST by ellery (I don’t remember a constitutional amendment that gives you the right not to be identified-R.Giuliani)
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I posted a vanity about Duncan Hunter and Intrade, and Pistolshot brought up some points about efficacy so I’m copying the post here.
(vanity) Why the smart money is on Duncan Hunter
Self ^ | 11/11/07 | Kevmo
Posted on 11/15/2007 3:43:17 AM PST by Kevmo
http://www.freerepublic.com/focus/news/1926032/posts?page=54#54
To: Kevmo; All
Intrade depends solely on those who play and do not constitute the vast majority who have either no idea how or want to participate. It is too easily manipulated by a very few. It may reflect a possible outcome, but it flies in the face of other well known polling organizations.
Even though Duncan is an honorable man, his campaign has failed from the begining. It is honorable not to ‘need consultants, or have people do work for you, or write your own speeches’, but the downside is you are too busy doing the small stuff to concentrate on the major stuff, like RUNNING for POTUS.
When you run a NATIONAL campaign, the objective is to get your message out to the people, not just in specific localities, but NATION-wide. And that takes people, and a management that understands what a NATIONAL campaign entails.
To that end, his campaign management has failed their man, and those of you who cannot see that are fighting a losing cause, as noble as that is, it is still a lost cause.
I know that pains you and the responses will be what they always are, childish and delusional. You will respond with all the failings of every other candidate just to make your self feel better and your guy look good, but only to you.
There will be those who say... “it’s a conspiracy’....”the powers that be are not letting Duncan get his message out”......”the MSM is in cahoots with the Bush administration to muzzle Hunter” No matter that the MSM hates GWB, and there is no basis for them to even be in the same room.
The truth, as painful as it is, is still the truth.
When the NRTL endorsed FDT earlier this week, the Mitt fans, Duncan supporters, Huckabee promoters, and Rudy ravers had a complete breakdown on this forum. More inconsequential, minor-league obscure articles appeared to try and promote ‘your’ candidate.
Face it. The NRTL endorsement is one of the biggest chips to have on your side of the table in this high stakes game.
Next for Fred will be the NRA endorsement, with it’s 6-7 MILLION members. And that will be a very big chip, indeed.
54 posted on 11/15/2007 6:00:40 AM PST by Pistolshot (Never argue with stupid people, they just bring you down to their level and beat you with experience)
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