Trading data from 2004 and 2008 U.S. presidential elections

We often get requests for data from our political markets, so here they are, free to download. Our way of celebrating this Thanksgiving, and the rebirth of America’s moral leadership. Enjoy!

Click on an image to download the data in Excel format.

trading history of the "Democrat to be elected President" contract from February 2007 to election day (November 4, 2008). Click the image to download the data in Excel format.

2008 election: trading history of the {Democrat to be elected President} contract from February 2007 to election day (November 4, 2008).

trading history of the {Bush to be reelected President} contract from mid-July 2003 to election day (November 2, 2004).

2004 election: trading history of the {Bush to be reelected President} contract from mid-July 2003 to election day (November 2, 2004).

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Dinner with Paul Krugman

Today’s great news is Paul Krugman‘s Nobel Prize. Although he received the award for his work on international trade and economic geography, it is hard to escape the idea that the Nobel committee may also have been influenced by Krugman’s prescient, relentless and ultimately successful battle against Bush’s plan to privatize Social Security, as well as his repeated warnings that U.S. growth these last few years was an illusion built on top of a soon-to-implode housing boom.

I had the pleasure of meeting this brilliant, generous man two years ago when he came over for dinner in my brother David’s home accompanied by his wonderful wife Robin Wells, also an economist at Princeton. Over a delicious anticancer menu, we discussed health care, politics and the economy. But when talk turned to prediction markets, he was… skeptical. So it’s gratifying to see that, nowadays, he seems to be keeping a rather careful eye on the political markets!

Franklin SS, Edouard SS, Paul Krugman, Emile SS, Robin Wells, David SS

Paul Krugman and wife Robin Wells with the Servan-Schreiber brothers (from left to right: Franklin, Edouard, Emile of NewsFutures, and David), September 2006.

No prediction market, or any other betting pool (including this one from Harvard) nailed the Nobel committee’s choice. This failure is expected, since the decision is made in secret by a closed group, and typically for work done decades ago, out of the scope of current events which might give the rest of us some inkling about the outcome.  Market predictions are known to be pretty useless in such situations, for there’s no information to aggregate: it’s garbage in, garbage out. The same doesn’t apply to, say, TIME’s Person of the Year, which, although decided also in secret by a closed group, very much takes into account recent observable history. Here’s, for instance, NewsFutures’ prediction for Barack Obama to be Person of the Year 2008:

Probability that Barack Obama will be TIME Person of the Year 2008

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Wisdom of Crowd Consulting Workshop – NYC 10/27/2008

We’re excited to announce the first Wisdom of Crowds Consulting Workshop, to be held in New York City on October 27th, 2008. It is designed especially for small and medium-size business consultancies who would like to acquire a working knowledge of how to put collective intelligence to work for their clients.

Consulting Workshop

Over the years, we’ve had the chance to partner with some leading consultancies (eg, SAIC, Rand, BAH, Accenture, New England Consulting Group, Market Tools), and a host of smaller ones, to deliver creative wisdom-of-crowds solutions to their clients. Such partnerships are always rewarding and efficient because they combine our expertise in prediction markets with a consultant’s deep knowledge of the client’s business processes.

The workshop will focus practical implementation issues and hands-on experience with various software tools, so that, by the end of the workshop, the participants can be certified as NewsFutures Preferred Consulting Partners.

The one-day program will cover:

  • Foundations. Prediction Markets and Wisdom of Crowds 101: principles, mechanisms, evidence, and applications
  • Applications. Case studies in strategy, forecasting, innovation, and project management
  • Tools. Hands-on experience with various software tools: Prediction Markets, Competitive Forecasting, Idea Pageant, and Impact Matrix
  • Practice. Keys to a successful implementation: information, integration, inclusion, interface, and incentives
  • Collaboration. Nuts and bolts of collaboration with NewsFutures

Please visit these links for more information, or to register for the workshop.

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Bambi Francisco & friends discuss the NewsFutures Exchange on Vator.tv

Bambi Francisco left CNBC’s MarketWatch last year to start Vator.tv, a highly entertaining video-based website dedicated to vetting pitches from innovator. This week, her show took a deep look at NewsFutures’ public prediction exchange (not our enterprise solutions business). Paul Martino, whose company Aggregate Knowledge is about predicting behavioral outcomes based on the aggregate actions of crowds, brought his expert point of view. All told, Bambi, Paul, and Ezra Roizen (a Vator.tv regular) “liked the company.” Check out the show by clicking the video below:

Ezra Roizen, Paul Martino, Bambi Francisco discuss NewsFutures on Vator.tv

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Financial Times writes about Bet2Give

Bet2GiveOver the weekend, the Financial Times published a great article about America’s favorite charity-driven prediction market: our very own Bet2Give. Exploring the intersection between philanthropy and online betting requires dedication and persistence, which is another way of saying that the value proposition isn’t immediately obvious to everyone, but the FT’s article highlights an exciting new trend: Some charities are now linking to Bet2Give from their home pages, encouraging their members/donors to use our prediction market as a fund-raising tool. Cool! That’s exactly what we built it for.

There is a discordant note at the end of the article, where respected philanthropy consultant Lucy Bernholz questions whether Bet2Give’s donations aren’t just a gimmick to draw eyeballs. Well, we obviously want to grow traffic, because that translates into impact. But Lucy should realize that 95% of the money that is put into Bet2Give by its traders is eventually given to their chosen non-profits. That’s hardly a gimmick. Few non-profits, in fact, have such low overhead fees.

The article also discusses Longbets.org, another great site well worth visiting.

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Red Herring in the Mediterranean

Emile Servan-Schreiber and Alex Vieux

I had the honor this week of being a surprise keynote interviewee at the Red Herring Europe 2008 conference in Malta. Alex Vieux, the Herring’s inspirational publisher, made the impromptu decision to bring me on stage to educate the audience, filled with brilliant young entrepreneurs and venture capitalists, about the concept and virtues of prediction markets. A show of hands, afterwards, indicated that this crowd agreed we were onto something big!

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How InterContinental Hotels Group Innovates with NewsFutures

Every business needs to innovate regularly, but betting on new ideas is always risky and the failure rate is high. The New York Times recently ran a detailed article about how companies can better their odds of harnessing and selecting winning new ideas, by turning to prediction markets and the wisdom of crowds.

The InterContinental Hotels case study features NewsFutures’ Idea Pageant, a proprietary prediction market variant that we designed especially with a large-scale innovation process in mind: Whereas regular “trading” markets can be used to rank a few ideas, this approach is terminally cumbersome when dealing with several dozens or hundreds of ideas… The Idea Pageant, on the contrary, is highly scalable, as this case study illustrates.

Zubin Dowlaty of InterContinental Hotels Group

Here’s the relevant extract from the New York Times article:

At InterContinental Hotels, Zubin Dowlaty, vice president for emerging technologies, decided to create an online market last fall to “harvest and prioritize ideas” from within the hotel’s 1,000-person technology staff. “We wanted to tap the creative class that may not be able to voice their ideas,” Mr. Dowlaty said.

With InterContinental’s prediction market, players were asked to submit ideas anonymously, with a description and the benefit to customers and company. The bettors were given virtual tokens, each receiving 10 green ones to be placed on the best ideas and three red for bad ideas.

There were no limits on the number of times bettors could change their wagers as new ideas came to market, and the market was open for four weeks. The five top ideas (most green tokens), five bottom ideas (most red) and the top five bettors (most accurate, according to market consensus) were listed regularly.

The winners got $500, while second- and third-place finishers received $250 each. The winners, Mr. Dowlaty said, were engineers, analysts and contractors, not managers.

More than 200 people participated, submitting 85 ideas. One person proposed bringing back quarter-operated vibrating beds. “That one got beat down really fast,” Mr. Dowlaty said.

The winning ideas were suggestions to improve searching the company’s Web site to find and book hotel rooms. Two projects have been started as a result of the market, Mr. Dowlaty said.

We were happy to learn later that one of the two projects that got started as a result of the market featured such an innovative way of using Google Maps that Google wrote a case study about it…

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