On December 7 of last year, the Carolina Panthers were 3-8-1 and I spent about 1100 Inkles forecasting that they would make the playoffs. Even at long odds, this may seem like wasted Inkles--I'm pretty sure that a 3-8-1 had never gone on to make the playoffs. But there were a couple other important factors.
As I've become more involved with prediction markets, I've grown increasingly frustrated with journalists who make predictions (aka pundits) without linking to prediction market questions. This is, in my opinion, lousy journalism, and insulting to readers.
In growing my Inkling score from five thousand to ten million Inkles, one of the most important questions was related to the number of points each team would score in the most recent NBA season. The question asked about the difference between each team's points and the average of all teams.
When my grandmother immigrated to the United States, she couldn't afford to call her family on the telephone. That was about 70 years ago. Today, I have a friend whose brother moved to Sri Lanka to become a Buddhist monk and literally lives in a cave. He and his family Skype. This is the power of the Internet--for a significant portion of the planet, it's now possible for any two people to communicate from anywhere, in real-time, basically for free.
Barry Ritholtz has written a curious column titled The 'Wisdom of Crowds' Is Not That Wise for Bloomberg View, which criticizes prediction markets. This is not a new view for Ritholtz, as he reminds us by linking to six blog posts critical of prediction markets each written by...Barry Ritholtz. Indeed Ritholtz has made it his mission to find instances of prediction markets 'failing', and has found six of them.