|Predictalot for World Cup: Millions of predictions, stock market action||Why automated market makers?|
More people are playing Predictalot today than Mafia Wars or Zynga Poker… On Yahoo!, that is.
In fact, Predictalot is the #1 game app on Yahoo! Apps by daily count. By monthly count, we are 5th and rising.
A prediction is being made about every three minutes.
Come join the fun.
What is a better investment objective? Grow as wealthy as possible as quickly as possible, or Maximize expected wealth for a given time period and level of risk The question is at the heart of a fight between computer scientists and economists chronicled beautifully in the book Fortune’s Formula by Pulitzer Prize nominee William Poundstone. [...]
What exactly is a combinatorial prediction market? 2010 Update: Several of us at Yahoo! Labs, along with academic researchers, have theorized and written about combinatorial prediction markets for several years, as you’ll see below. But now we’ve gone beyond talking about them and actually built one. So the best way to answer the question is [...]
There are many examples of multi-outcome prediction markets, for example election markets with more than two candidates, or sports championship markets with dozens of teams. What is the best way to implement a multi-outcome prediction market? The simplest way is to effectively ignore the fact that there are multiple outcomes, breaking up the market into [...]
One of the purest and most fascinating examples of the “wisdom of crowds” in action comes courtesy of a unique online contest called ProbabilitySports run by mathematician Brian Galebach. In the contest, each participant states how likely she thinks it is that a team will win a particular sporting event. For example, one contestant may [...]
A number of naysayers [Daily Kos, The Register, The Big Picture, Reason] are discrediting prediction markets, latching onto the fact that markets like TradeSports and NewsFutures failed to call this year’s Democratic takeover of the US Senate. Their critiques reflect a clear misunderstanding of the nature of probabilistic predictions, as many others [Emile, Lance] have [...]
Robin Hanson invented a wonderful market maker well suited for use in prediction market applications with a long name: the logarithmic market scoring rule market maker, which I’ll abbreviate as LMSR. (In fact, Hanson invented an entire class of market scoring rule market makers, but the logarithmic variant seems the most useful.) Hanson’s two papers [...]