Talk:Prediction market

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Note to editors[edit]

(Note to future editors: Please distinguish between a public fact and a rumor.)

Sholdn't http://guaranteedweather.com/ be listed on this page?

I found this anonymous comment inappropriately added to the article, so I put it here. --babbage 10:21, 12 Dec 2004 (UTC)

Owise[edit]

Someone has disputed that Owise belongs on this page.

How is Owise.com less of a prediction market than Newsfutures? Sure Owise uses a fake ranks, and Newsfutures uses fake money, but what's the difference, really?

If you want to limit this page to only real-money systems, Newsfutures should also be removed.

The Owise site is explicit that it is not a prediction market [1]. It's something else, possibly fitting better in some Collaborative filtering area. —Preceding unsigned comment added by Cretog8 (talkcontribs) 05:17, 12 June 2008 (UTC)

New "list" article(s) needed?[edit]

I think it would be helpful to have a new page called "List of prediction markets" or something similar, much like the current List of spreadsheets and List of word processors (among others); the "external links" section is getting a little cluttered. Or maybe it would be even better to have two new pages, "List of prediction market exchanges" and "List of prediction market software", since the two are for the most part distinct. Does anyone else have an opinion on this? Yaron K. 20:44, 7 December 2006 (UTC)

See Category:Prediction markets. — Swpbtalk.edits 17:51, 4 January 2008 (UTC)

Iowa Health Prediction Market[edit]

The University of Iowa has a new prediction market to forecast infecteous diseases, especially flu. This seems like an application worth mentioning in this article. The website is: http://fluprediction.uiowa.edu/fluhome/index.html. --Benstrider 23:36, 1 March 2007 (UTC)

removed section[edit]

removed section per Wikipedia is not a directory. Wikipedia is not a repository for lists, directories or Advocacy of commercial products and/or websites. NPOV requires views to be represented without bias, this applies not only to article text, but to companies, company lists, products, external links, or any other material as well.--Hu12 00:23, 4 May 2007 (UTC)

Flawed[edit]

Entire concept is flawed. Insider trading, manipulation. No SEC equivalent. Market prices in such would reflect likely futures about as well as current stock prices reflect company quality, that is, not at all.

Its not. Brusegadi (talk) 04:56, 12 June 2008 (UTC)

- Why is the PM concept flawed? Do you have any evidence that supports this? —Preceding unsigned comment added by 129.240.70.150 (talk) 13:05, 8 September 2007 (UTC)

-- It doesn't matter if the concept is flawed, merely that it is an important enough concept, or is used by enough people, for a Wikipedia entry. After all Intelligent Design is a deeply flawed concept (i.e. it is wrong) and yet there is a large and often edited article on it... Duncan 10:57, 22 October 2007 (UTC)

The only way insider traders could make money would be by increasing the accuracy of the prediction. 75.61.102.8 (talk) 04:44, 12 June 2008 (UTC)

- Incorrect. An insider could short sell, then deliberately sabotage the outcome of an event. —Preceding unsigned comment added by 216.12.8.141 (talk) 17:11, 13 June 2008 (UTC)

Apart from the possibility of allowing such strategies, if you have enough players, thats too expensive. People will make money off you. Brusegadi (talk) 23:37, 13 June 2008 (UTC)
I find it hilarious that in your attempt to criticize prediction markets, your example actually increases the accuracy of the market! --Gwern (contribs) 16:15 15 August 2011 (GMT)

It's not flawed it's just early in it's application to the internet, the concept is as old as the trading itself. 136.206.222.20 (talk) 14:06, 15 August 2011 (UTC)

Footnotes go after punctuation[edit]

Note to editors: Footnotes go after punctuation. --JHP 06:30, 1 September 2007 (UTC)

Legality of InTrade in U.S.?[edit]

The article claims

Notable exceptions are Intrade/TradeSports, which escapes U.S. legal restrictions by operating from Dublin, Ireland, where gambling is legal and regulated,

without supporting that statement with a reference. Intrade's own FAQ specifically refuses to answer the legality question [2]. Further the given rationale does not hold water: just because a betting site operates legally in its country does not mean that it can legally offer betting services to U.S. residents or that U.S. residents can legally gamble on the site. AxelBoldt (talk) 21:39, 7 February 2008 (UTC)

Until someone can find more reliable citations, I recommend (and plan on) adding a comment that it's unknown whether the rationale means that US residents can legally use Intrade. JustinBlank (talk) 01:12, 3 September 2008 (UTC)

The wording is ambiguous, not necessarily incorrect, it should probably be more explicit. Intrade is allowed to operate because it is in Ireland. Thus Intrade itself avoids prosecution by US authorities. This does not mean people in the US are allowed to place bets without breaking US law though. The CEO of Intrade has said in correspondence with US authorities that he is unsure where he stands under US law. 129.170.66.218 (talk) 09:44, 7 September 2008 (UTC)

Prediction market vs. futures market[edit]

I'd like to see this article explain the difference between a prediction market and a futures market. --JHP (talk) 01:08, 30 May 2008 (UTC)

The factors underlying a prediction market are the outcomes of specified events. Underlying a futures market, on the other hand, are the prices of commodities, stocks and their indices. 75.61.102.8 (talk) 04:47, 12 June 2008 (UTC)
According to "Business Dictionary" at {http://www.businessdictionary.com/definition/physical-market.html}, (1) a physical market is "a commodity market where purchasers actually buy the commodities, as opposed to the futures market, where they buy and sell the right to purchase commodities at a future date". The following words were underlined in the previous quote: market, purchasers, buy, commodities, futures market, sell, right, and purchase. Using the same source, (2) a futures market is a "Market in which participants can buy and sell commodities and their future delivery contracts. A futures market provides a medium for the complementary activities of hedging and speculation, necessary for dampening wild fluctuations in the prices caused by gluts and shortages." The following words were underlined in the previous quote: Market, participants, buy, sell, commodities, delivery, contracts, provides, activities, hedging, speculation, fluctuations, prices, gluts, and shortages. I claim without citation that in common American vernacular "Futures market" is heard on the news more often than "Prediction market". Does anyone dispute this claim or need citation from a scientific survey concerning what is common vernacular? I had never heard the term Prediction market used until I looked for the definition of futures market and this Prediction market Wikipedia article appeared as an option. Why is this article titled Prediction market instead of Futures market? Which of the two phrases, "predictive market" and "futures market" is more useful? I propose that this article's title be changed to "Futures market" unless there is a difference because of an English, the nation, difference or an objection that the phrase Prediction market is used more often in society than the phrase Futures market. Gauzeandchess (talk) 03:14, 7 February 2012 (UTC)
Er... what? You don't hear prediction market because prediction markets are currently banned in America with the exception of the tiny IEM. Even were they not banned, futures would still be far more common because countless businesses large & small would use them. So no, the name should not be changed. --Gwern (contribs) 15:05 7 February 2012 (GMT)
Is a prediction market the same as a futures market? I could not find a definition that makes a distinction between them at {http://www.querycat.com/question/afa3f14b02bf1b6450b5f6fccd9a2018}. A difference between the two markets could be at {http://bpp.wharton.upenn.edu/jwolfers/Papers/DoesMoneyMatter.pdf}, which stated a hypothetical prediction market contract might "pay $100 if George W. Bush is re-elected in 2004, or nothing if he is not. Thus, until the outcome is decided, the trading price reflects the traders’ collective consensus about the expected value of the contract, which in this case would be proportional to the probability of Bush’s re-election." How is this different than a futures market contract that stipulates a given product, such as wheat, will be sold at P price per volume if there is a drought or if there is a bounty, which itself is based upon the probability of a drought or bounty? Is there a small difference between the two markets? I would like to delete these questions and retract my previous suggestions for changes if there is a difference. Gauzeandchess (talk) 06:17, 9 February 2012 (UTC)
What commodity are you buying on a prediction market? How many GWB shares must I buy to get delivery of a pork belly or an ounce of silver in November 2004? --Gwern (contribs) 15:03 9 February 2012 (GMT)
I infer by your question that you claim there is a difference between a prediction market and a futures market wherein one could not purchase a product or service in a prediction market, such as GWB (Great Western Broadcasting or Gypsum Wall Board) pork shares whereas one could purchase a product or service, such as GWB pork shares in a futures market? If my inferred statement represents your claim for a difference between a prediction market and a futures market, then could you please cite an academic text that also supports this claim? Does a prediction market contract cover the following hypothetical? I sign a contract purchasing S shares of pork for D dollars to be delivered at future T time unless there is an increased pork price from an increased fuel price, which stipulates that the cost would be D + 1 regardless of the increased pork price. If this hypothetical contract is a prediction market contract and is a futures market contract, then is there a difference between the two market types? What is the difference between a prediction market contract and a futures market contract? A futures market contract is a transfer of possession of something. And in this hypothetical, a prediction market contract took possession of something. Is this not the case for a prediction market? It is difficult for me to understand the difference between the two market types because I cannot find much about the difference from doing internet research or find out much about the difference based on your question "What commodity are you buying on a prediction market?". In answer to your question, firstly I don't know the answer to your question because I don't know what a prediction market is, hence my questions about this topic, other than the stipulation about a money exchange when some future event occurs, secondly, I described a hypothetical scenario where a prediction market contract took possession of pork that would have an exchange of money in the future if some future event occurred. Does this type of contract occur in a futures market? I didn't know what GWB stood for and found two likely meanings at "http://www.abbreviations.com/GWB". Gauzeandchess (talk) 09:51, 14 February 2012 (UTC)

Let me take a shot at this. When one buys a security in a prediction market, what one is buying is a payout if a particular verifiable future condition turns out to be true. Suppose I think that the likelihood of a particular candidate winning an election is 70%. Then, I should be willing to pay up to 70 cents for a security that issues a dollar if that event is true (and sell securities that pay more than 30 cents for another candidate). Who would issue such a security? One example is an individual who could make a larger amount of money off of a given bit of information, doesn't know it, and wants to elicit the information from a different group who may know, but doesn't trust their opinion. The prediction market is thus a particular kind of futures market where predictions and money are the only commodities changing hands. It is certainly possible to make a prediction market security that refers to a futures market (this asset pays out $1 if the price of corn is greater than X at time T according to so-and-so). Note that I don't actually buy or sell any corn: it's a side-bet. John b cassel (talk) 13:37, 18 February 2012 (UTC)

External links stand to be improved[edit]

Does anyone suppose that the external links should be to actual prediction markets instead of web sites about them? I was sure, given my experience with Wikipedia, that this article would link to some primary sources. Certainly the secondary sources have academic merit, but please keep the reader in mind: Which links will serve the greater number of readers?

And yes, I am familiar with WP:EL. I'm not familiar with anything in it that would preclude helpful links to primary sources, because if there is, I am sure that WP:IAR, which which I am also familiar, would preempt it. 75.61.102.8 (talk) 04:49, 12 June 2008 (UTC)

Related prediction methods[edit]

The "Related prediction methods" section seems unnecessary to me as a whole. Of course there's other ways of trying to aggregate information for predictions, but unless it can relate very directly to prediction markets, it seems like stuff for other articles. Cretog8 (talk) 05:21, 12 June 2008 (UTC)

I removed the section. In case someone wants to work with the material to include in other articles, I've put it (for now) on my Scratchpad.Cretog8 (talk) 18:37, 20 June 2008 (UTC)

Bot report : Found duplicate references ![edit]

In the last revision I edited, I found duplicate named references, i.e. references sharing the same name, but not having the same content. Please check them, as I am not able to fix them automatically :)

  • "pmdmm" :
    • [http://www.newsfutures.com/pdf/Does_money_matter.pdf "Prediction Markets: Does Money Matter?"] Servan-Schreiber (Electronic Markets, 2004)
    • [http://www.newsfutures.com/pdf/Does_money_matter.pdf "Prediction Markets: Does Money Matter?"] Servan-Schreiber (Electronic Markets, 2004)

DumZiBoT (talk) 02:48, 9 August 2008 (UTC)

Max Keiser[edit]

Hollywood Stock Exchange creator Max Keiser suggests that not only are these markets no more predictive than their established counterparts such as the New York Stock Exchange and the London Stock Exchange, but that reducing the unpredictability of markets would mean reducing risk and, therefore, reducing the amount of speculative capital needed to keep markets open and liquid.

The first part of this paragraph claims that these markets are no more predictive and the rest of it describes the advantages of being more predictive. This doesn't sound right. Since no source is given, it is not possible to check the paragraph and I removed it.

The original Version added by an anonymous writer was quite different but also unsourced.

Adding to the chorus of those who question the powers of markets to predict outcomes is Hollywood Stock Exchange creator, Max Keiser, who, summing up his views in a letter published in the Financial Times suggests that not only are these markets no more predictive than their established counterparts, such as the New York Stock Exchange and the London Stock Exchange, but that if markets could predict outcomes then it would no longer be capitalism. Reducing unpredictability of markets through predictability of outcomes would mean reducing risk and, therefore, reducing the amount of speculative capital lost and that is needed to keep these markets open and liquid.

78.48.176.195 (talk) 11:07, 7 March 2009 (UTC)

Refs: FT letter; mirror. For those interested in market manipulation, Hanson has already addressed the topic. --Gwern (contribs) 16:39 7 March 2009 (GMT)

History section makes some impressive claims for Hollywood stock exchange but does not give any source for these - unless these claims can be given a valid source then they seem like opinion — Preceding unsigned comment added by 78.149.205.94 (talk) 23:20, 4 November 2012 (UTC)

Broken link[edit]

Broken link in 10th reference —Preceding unsigned comment added by 212.192.248.201 (talk) 13:55, 12 December 2010 (UTC)

Thanks for pointing it out. Replaced it with a working link. --Ronz (talk) 17:07, 12 December 2010 (UTC)