[extropy-chat] US election prediction markets failure

[Robin Hanson]

At 05:10 AM 11/13/2006, Bill K wrote:
>After the election, The Register has a very cutting article detailing
>how the prediction markets failed in this case.
><http://www.theregister.co.uk/2006/11/11/prediction_markets_not_so_wise/>
>This week however the people spoke - and the markets failed.

If a prediction mechanism is said to be a failure if it ever assigns less than
50% chance to the event that happened, then every prediction mechanism
will be a failure.   A more reasonable standard is to compare mechanisms and
see which ones are on average more accurate.



Robin Hanson  rhanson at gmu.edu  http://hanson.gmu.edu
Associate Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326  FAX: 703-993-2323