Comments on: The wisdom of the ProbabilitySports crowd http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/ Musings of a computer scientist and Yahoo on prediction markets, gambling, and estimating the odds of everything Fri, 12 Mar 2010 21:58:30 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Seahawks Spot http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-100 Seahawks Spot Sun, 08 Mar 2009 22:34:58 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-100 This is very interesting. In a true prediction market, as i understand it, you must have a buyer and a seller. So, for every 80% there must be a 20% willing to make a deal. So, it seems, that would limit the ability of experts to participate in the ‘market’. If the market price is 80% for the chargers to win, I cannot but a 70% very easily. Of course, I may be missing something. This is very interesting. In a true prediction market, as i understand it, you must have a buyer and a seller. So, for every 80% there must be a 20% willing to make a deal. So, it seems, that would limit the ability of experts to participate in the ‘market’. If the market price is 80% for the chargers to win, I cannot but a 70% very easily.

Of course, I may be missing something.

]]> By: James Ward http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-99 James Ward Wed, 16 Jul 2008 01:57:14 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-99 BeatVegasLine.com ask users to pick the winning team versus the vegas line and presents the picks as pie charts. Does this meet the requirements for a valid "Wisdom Of The Crowd" experiment? BeatVegasLine.com ask users to pick the winning team versus the vegas line and presents the picks as pie charts. Does this meet the requirements for a valid “Wisdom Of The Crowd” experiment?

]]> By: Antonio http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-98 Antonio Sat, 24 May 2008 02:17:14 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-98 So I guess my question is, is there any way to take that information you laid out and use it to one's advantage? I have always been interested in mathematical formulas, so I was just curious about your perspective. So I guess my question is, is there any way to take that information you laid out and use it to one’s advantage? I have always been interested in mathematical formulas, so I was just curious about your perspective.

]]> By: Midas Oracle .ORG » Blog Archive » The Wisdom Of Crowds: James Surowiecki on the predictive accuracy of the horse race betting markets http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-97 Midas Oracle .ORG » Blog Archive » The Wisdom Of Crowds: James Surowiecki on the predictive accuracy of the horse race betting markets Wed, 25 Apr 2007 12:58:45 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-97 [...] As for the idea that informed traders are solely responsible for the accuracy of betting odds, that cannot explain what happens in parimutuel markets — which is how horse-racing odds are determined in the U.S. Obviously, the more informed traders are, the better. But in a pari-mutuel market, every single bet (informed or otherwise) that’s placed affects the final odds. So if you exclude, say, the suckers, then you almost certainly change the final odds. Yet we know that those odds are remarkably accurate. It’s possible that if allowed only the crowd of informed traders to bet, the odds would improve. But you’d have to be confident in your ability to identify them beforehand — no easy feat — and in any case the room for improvement is very small. Dave Pennock [and Daniel Reeves]’s work on probability averaging is relevant in this regard. [...] [...] As for the idea that informed traders are solely responsible for the accuracy of betting odds, that cannot explain what happens in parimutuel markets — which is how horse-racing odds are determined in the U.S. Obviously, the more informed traders are, the better. But in a pari-mutuel market, every single bet (informed or otherwise) that’s placed affects the final odds. So if you exclude, say, the suckers, then you almost certainly change the final odds. Yet we know that those odds are remarkably accurate. It’s possible that if allowed only the crowd of informed traders to bet, the odds would improve. But you’d have to be confident in your ability to identify them beforehand — no easy feat — and in any case the room for improvement is very small. Dave Pennock [and Daniel Reeves]’s work on probability averaging is relevant in this regard. [...]

]]> By: Midas Oracle .ORG » Blog Archive » Does wisdom require markets? http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-96 Midas Oracle .ORG » Blog Archive » Does wisdom require markets? Fri, 09 Feb 2007 13:56:38 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-96 [...] Indeed, after many person-hours spent playing with probability judgments from the ProbabilitySports contest — trying all kinds of fancy expert-weighting schemes and machine learning algorithms — my colleagues and I found it exceedingly difficult to consistently produce a better forecast than by simply averaging everyone’s probabilities. Moreover, averaging came within striking distance two prediction markets — TradeSports and NewsFutures — performing a hair worse, but statistically insignificantly so. [...] [...] Indeed, after many person-hours spent playing with probability judgments from the ProbabilitySports contest — trying all kinds of fancy expert-weighting schemes and machine learning algorithms — my colleagues and I found it exceedingly difficult to consistently produce a better forecast than by simply averaging everyone’s probabilities. Moreover, averaging came within striking distance two prediction markets — TradeSports and NewsFutures — performing a hair worse, but statistically insignificantly so. [...]

]]> By: Daniel Reeves http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-95 Daniel Reeves Wed, 31 Jan 2007 00:33:50 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-95 Dave indirectly pointed me to a new paper by Lichtendahl and Winkler at Duke ("Probability Elicitation, Scoring Rules, and Competition among Forecasters") that gives a model in which participants care about their rank order in the contest as well as the raw payment from the scoring rule. In that model the miscalibration may in fact be rational, rather than overconfidence bias. I think this points to the need for meaningful payment in prediction markets! Dave indirectly pointed me to a new paper by Lichtendahl and Winkler at Duke (“Probability Elicitation, Scoring Rules, and Competition among Forecasters”) that gives a model in which participants care about their rank order in the contest as well as the raw payment from the scoring rule. In that model the miscalibration may in fact be rational, rather than overconfidence bias.

I think this points to the need for meaningful payment in prediction markets!

]]> By: Midas Oracle .ORG » Blog Archive » How to publish a high-quality prediction market blog http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-94 Midas Oracle .ORG » Blog Archive » How to publish a high-quality prediction market blog Mon, 29 Jan 2007 15:34:15 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-94 [...] #13. Branch out in other forecasting techniques. [...] [...] #13. Branch out in other forecasting techniques. [...]

]]> By: k-rat http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-93 k-rat Fri, 19 Jan 2007 15:33:02 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-93 Of course, the mentioned expert would participate in the 80/20 contract because he thinks the 20 is a bargain! So, what i really meant to point out was that the prediction-market (TradeSports for example) does not capture the same data about what experts really think about the probabilities. Of course, the mentioned expert would participate in the 80/20 contract because he thinks the 20 is a bargain! So, what i really meant to point out was that the prediction-market (TradeSports for example) does not capture the same data about what experts really think about the probabilities.

]]> By: David Pennock http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-92 David Pennock Thu, 18 Jan 2007 19:57:07 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-92 That's correct. Though note that ProbabilitySports is not a prediction market, but rather a contest based on socring rules, so anyone can submit any probability that they want -- there is no matching required. That’s correct. Though note that ProbabilitySports is not a prediction market, but rather a contest based on socring rules, so anyone can submit any probability that they want — there is no matching required.

]]> By: k-rat http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/comment-page-1/#comment-91 k-rat Thu, 18 Jan 2007 15:26:31 +0000 http://blog.oddhead.com/2007/01/04/the-wisdom-of-the-probabilitysports-crowd/#comment-91 This is very interesting. In a true prediction market, as i understand it, you must have a buyer and a seller. So, for every 80% there must be a 20% willing to make a deal. So, it seems, that would limit the ability of experts to participate in the 'market'. If the market price is 80% for the chargers to win, I cannot but a 70% very easily. Of course, I may be missing something. This is very interesting. In a true prediction market, as i understand it, you must have a buyer and a seller. So, for every 80% there must be a 20% willing to make a deal. So, it seems, that would limit the ability of experts to participate in the ‘market’. If the market price is 80% for the chargers to win, I cannot but a 70% very easily.

Of course, I may be missing something.

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