The rise and fall of prediction markets

Yesterday I saw an announcement for Microsoft Prediction Lab which allows users to predict upcoming events such as elections. While prediction markets are nothing new—the Iowa Electronics Market has been operational since 1988 and, over time, has routinely outperformed traditional polls—I have not heard about them as much recently. Google Trends seems to validate the idea that their popularity has waned, with a slow…
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Nate Silver on prediction as art and science

Nate Silver’s presidential poll analysis cleaned up in 2008 with 49/50 states correct and 35/35 Senate races. Now he’s written a book on forecasting and unavoidable biases: In The Signal and the Noise, Silver looks at analysts in many fields, from weather to the economy to national security, and concludes that those who succeed at spotting…
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