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Prediction markets are a major interest of mine. I'm in a bit of a rush at the moment, so I'll have to make some more extensive comments later, but in the meantime here's some neat links on prediction markets:

* Tradesports, a real-money prediction market on political and news events. The 2008 president market currently gives a Democratic a 50% probability of winning the White House in 2008, Hillary Clinton a 55% probability of getting the Democratic nomination, and John McCain a 49% probability of getting the Republican nomination.

* Futarchy, a system of government semi-seriously proposed by Robin Hanson which would use prediction markets as a means of government decision-making. People would vote on values, and use a prediction market to determine the optimal government policies to achieve those values, which would help get around some of the godawful stupid things democracies tend to do.

* Storage Markets, a real-money (but limited access?) market on the computer storage industry

* The Policy Analysis Market, a proposed prediction market for policies in the Middle East. It was IMHO a great idea, and could have potentially prevented some of the stupid decisions which have been made in the Middle East. Unfortunately, the government ended the project after it was the media (including slashdot) had a knee-jerk reaction to it and demonized it. The funny thing is, after the project was cancelled and the media learned more about it, coverage of the project became much more positive.

On http://www.tradesports.com/v2/ the current odds that the "New internet gaming law" is passed and signed is at 18%.

I just did a search and found two but I am not sure if they are any good:

http://www.intrade.com/ where you can in many political, entertainement and world events

http://www.tradesports.com/ Mostly sports but also a bit of world events

We need to list some propositions for this on http://www.tradesports.com/ or some other similar site. In addition to the irony, I'd much rather use the value of that contract as an indicator over some news story or comment on the internet.

Google will come up with GoogleRate, a neat application that will automatically search for, record, archive, and then verify all these claims and predictions that everyone makes.

You're probably joking, but back in September Google mentioned that they've set up a prediction market system to use within their company, for the purpose of forecasting things like product launch dates and "many other things of strategic importance". I wouldn't be surprised if this is a lead-in to creating a publically-open prediction market for more general events, sort of like the Foresight Exchange, Yahoo's Buzz Game, or TradeSports.

Of course, they'd probably add some sort of Google-specific twist to it, such as forecasting the number of news reports or blog write-ups on a particular keyword (i.e. its "importance" or "impact"), or the future PageRank of a particular site. They probably couldn't legally use real money directly, so perhaps they'd raffle prizes based on earnings, sort of like Yahoo's done.

I should probably add the disclaimer that I have a bit of an obsession with prediction markets. They're statistically the best way to predict the future, better than either opinion polls or individual experts.

Sounds a little like Tradesports.com. They broker bets on non-traditional items like political events. Doesn't seem like a stretch for them to set up a pool on when a particular technology will reach a particular rate of adoption. Turns out that the (dynamically determined) odds that come up do tend to be a pretty good indicator of the likelihood of events.

"The End of Management?"

"Market Experiments Inside Companies"

Yahoo's prediction market

Prediction market

You too can bet in prediction markets!

www.tradesports.com will give you an up-to-the-second probability of everything you want to know.

TradeSports.com allows anyone to trade futures contracts on all manner of assertions, including assertions on the coming U.S. presidential election.

Checkout this site, which displays an electoral vote projection and map based on the state-by-state contracts for the 2004 U.S. presidential election. According to the TradeSports.com/InTrade market, the U.S. presidential election is tight, with Kerry projected to win 262 EVs to Bush's 242. 32 EVs are too close to call.

By what logic does that cost them nothing? They are giving away a couple percent of the company. Also, the stock does already have a market value, see tradesports.com where its value is determined by an active market.

Just because they are not paying cash does not make it any less real.

tradesports.com has a futures market on the relative price of the IPO. There is another futures market for the time of the IPO

The answer is that as long as I have nothing at stake if I'm wrong, then there's no incentive for me to attempt to be accuracy or even honest. Here's where betting comes in. For example, if I bet $50 that Bush will be reelected, then you have an idea of how much to weigh my claim. Further, with stock markets and other betting markets, we already have ways to collectively release information in a format that has high credibility. So a ban on Internet gambling reduces my abiltiy to make credible statements and reduces the forums on which I can make those statements.

Let's continue with the example. Suppose you live in a liberal state like California and dreadfully fear the possible reelection of G. W. Bush to the point that you're considering fleeing the country, if he is reelected. In the good old days before internet gambling, you were in trouble. No way to insure yourself against disaster. Now, there are overseas markets that trade in whether or not Bush wins. In fact, you can even do it by state. Maybe bet a few hundred that Bush carries California at 1:5 odds (a sure sign of coming doom) and you should have enough for that airline ticket and some food and lodging.

Ie, internet gambling can allow me to insure/hedge against various nontraditional events. Again another worthwhile activity sabotaged for the morality of the state.

This should be an interesting struggle. Macromedia has a number of popular professional web development products in addition to their popular flash line and large head start in animation. On the other hand Microsoft is probably the worst competitor a company could possibly come up against. They play fast and big and have the cash and credit to turn out your lights. They can buy anything or anyone they want in their quest to beat you and your products into submission. Most companies prefer to partner with them rather than compete directly against them. Anyone who has not already partnered with them is either or bit player or has joined the Rebel Alliance led by IBM and Sun Microsystems. Unless Macromedia gets the long term support of a wealthy patron such as IBM the pressure that Microsoft can bring to bear will eventually break them. At the very least that would make an interesting contract position on tradesports:

TradeSports

If you're serious about wagering, you could post a bid on tradesports.com

I have no affiliation with them, I just remember visting the site after reading about Saddam Futures

TraderSport is an online exchange based out of Ireland that basically creates a market on Future Contracts. Very cool because you can buy and sell contracts on a LOT of different things, ranging from Index (DJIA, SPX, etc) to Superbowl winners.

The beauty of it being a true exchange is that you can sell your contract at some point if you don't want to hold on to it anymore. Example: You buy Giants win 2004 Superbowl today which is valued very low, and say the Giants win their first game and the value goes up, you sell it make a couple of bucks and invest it elsewhere.

So...legalized gamling?

I'm considerably more Libertarian than the next guy, but you need to take the tin foil hat off for this one.

A futures market like this is just an efficient, effective tool for measuring the likelihood of something happening. It's essentially a datamining technique where you have a large number of intelligent actors processing information for you and coming together to find a market-clearing price. From this price, you can back out the likelihood of the event occuring.

This is nothing more than an application of sports betting or like the Iowa Electronic Markets, which I understand are good predictors of election results.

Alas, I'm afraid some of the more fanciful suggestions here will not come to pass. Do you really think a terrorist would be foolish enough to trade large on a DoD futures market right before committing some act? It would seem silly to do that with your DoD account when you could just sell airline and insurance stocks instead.

A market like this is not going to be sufficiently liquid for someone to either hedge the risk of an event or profit much on one.

That is, if you came to the market and tried to buy $3 billion worth of "Chippewa Falls destroyed by fire and brimstone SEP '03" futures, you'd probably spook the market and wouldn't find any profitable edge.

If I were the King of Jordan and I found out people were willing to pay $97 for a "King overthrown by December" I'd be pretty damned greatful for the head's up. It's like a free opinion poll.

And...except that it might be government sanctioned (though it would be easy enough to have an outside firm run the market), this is not different than betting sites making markets on whether Saddam will still be in power.

TIA sucks. But I think this is a not-so-novel, but pretty ingenious thing that really doesn't trample anyone's liberties.

tradesports.com has had a section for trading political events for some time now.
The events they have listed now are not as untasteful as DARPA's creation, but they did have quite a selection during and before the war with Iraq.
Hell, you can trade weather too...

The news here is that the DoD things this will provide useful intelligence. My boss's old company, TradeSports, has been providing a trading environment for this kind of stuff for years. You can get a futures contract on _anything_.

--
lds

there is a similar idea already running online:
http://www.tradesports.com

you can buy/sell futures for most current events- for example, you can buy saddam futures based on when/if you think saddam will be captured, or you can bet on what kobe bryant will be charged with. this is a real site where you can make lose money- crazy stuff.

Someone could go there and gamble. No TV delay in the ballpark.

I wonder if Vegas has a pool going on how many Iraqis will be killed?

You can bet on how long Saddam will last.

Right now, it looks like a 69% chance he'll be out by the end of the month (scroll down and look for IRAQ.SADDAM.MAR03).

The financial markets are currently predicting a 65% chance that Saddam will be gone before the end of this month, and a 95% chance before the end of April.

There seem to be a lot of Slashdotters posting self-confident predictions of the outcome of the war. If you really believe in what you say, you should start trading (unless, of course, your predictions coincide with those of the market's).

Tor