CFM = Prediction
Markets
— The Vertical Portal to Event Derivatives,
Prediction Markets and Prediction Exchanges — Since
2003
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Our Network - CFM
= Vortal To Prediction Markets + Midas
Oracle .ORG = Prediction Markets For All + Midas
Oracle .NET = Prediction Markets For Enterprises + Midas
Oracle .COM = Prediction Markets For People
"Come to the wonderful world of collective intelligence,
wisdom of crowds, and prediction markets!... The sun shines bright, the
market-generated predictions are vastly superior to the polls as election
predictors, and the track record of the public prediction markets stretches
as far as the eye can see. There are opportunities aplenty in the field
of prediction markets, and the trading technology is cheap. Every working
enterprise can have its own internal prediction exchange, and inside
every exchange, a set of enterprise prediction markets that correctly predicts
the future of business, which their happy, all-American CEO listens to.
Life is good in the magic world of prediction markets... it's
paradise on Earth."
Ha! ha! ha! ha!... That's what they tell you, anyway... ---because they
are selling an image (just as Bernie Madoff did). They are selling it thru their vendor websites,
vendor conferences, vendor-inspired articles in blogs, newspapers and
magazines, and interviews of vendor data-fed professors in the media.
The reality check is that the social utility of the
prediction markets
is very marginal. The aggregated information has value only for the
totally uninformed people (a group that comprises those who overly
obsess with prediction markets and have a narrow cultural universe).
The added
accuracy is minute, and,
anyway, doesn't
fill up the gap between expectations and omniscience (which is how
people
judge forecasters). In our view, the social utility of the prediction
markets lays in efficiency, not in accuracy. In
complicated situations, the prediction markets integrate expectations
(informed by facts and expertise) much faster than the mass media do. It is their velocity that we should put to work.
Remember, dear readers, you heard it here first ---on Midas Oracle.
External Resources - Midas Oracle - Best Resources on Prediction Markets + Midas Oracle - Probabilistic Predictions + Midas Oracle - Post-Mortem + Wikipedia on Prediction Markets + International
Institute Of Forecasters' SIG on Prediction Markets + Delicious on Prediction Markets + OddHead on Prediction Markets + The
Journal Of Prediction Markets + LinkedIn Group on Prediction Markets + MIT's Center For Collective Intelligence + Wikipedia on Collective Intelligence + Wikipedia on The Wisdom Of Crowds + Wikipedia on Derivatives + Wikipedia on Forecasting + Forecasting Principles + Wikipedia on Knowledge Management + Friedrich
August Von Hayek: The
Use of
Knowledge in Society
Generic Google Search - "event
derivatives" —
"event
derivative" —
"event-driven
derivatives" —
"event-driven
derivative" —
"prediction
markets" —
"prediction
market" —
"betting
markets" —
"betting
market" —
"prediction
exchanges" —
"prediction
exchange" —
"betting
exchanges" —
"betting
exchange" —
"decision
markets" —
"decision-aid
markets" —
"information
aggregation mechanisms" —
"wisdom
of crowds" —
"collective
intelligence" —
forecasting
A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event,
such as an election. A contract pays $100 only if candidate X wins the
election, and $0 otherwise. When the market price of an X contract is
$60, the prediction market believes that candidate X has a 60% chance
of winning the election. The price of this event derivative represents
the imputed perceived likelihood of the partially uncertain future
outcome (i.e., its aggregated expected probability). A 60%
probability means that, in a series of events each with a 60%
probability, the favored outcome is expected to occur 60 times out of
100, and the unfavored outcome is expected to occur 40 times out of 100.
Each prediction exchange organizes its own set of real-money and/or
play-money markets, using either a CDA or a MSR mechanism —with or
without an automated market maker.
Prediction markets enable us to attain collective intelligence. Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events
by aggregating disparate pieces of information that the traders bring
when they agree on prices. The event derivative traders are informed by
the primary indicators (i.e., the primary sources of information), like
the polls, for instance. These informed speculators then execute their
transactions based on their anticipations about the future
—anticipations that will be either confirmed or infirmed.
The value of a set of prediction markets consists in the added accuracy
that these prediction markets provide relative to the other meta
predictive mechanisms, times the value of accuracy in improved
decisions, minus the cost of maintaining these prediction markets,
relative to the cost of the other meta predictive mechanisms. A
highly accurate set of prediction markets has little value if some
other meta predictive mechanism(s) can provide similar accuracy at a
lower cost, or if very few substantial decisions are influenced by
accurate predictions on its topic.
Aiming at
Predicting the Future — via Event
Derivatives (Traded Bets), Prediction Markets
(Event Derivative Markets), Prediction Exchanges
(Event Derivative Exchanges)
1. CFM
= Vertical portal on event
derivatives (traded bets), prediction markets (event derivative
markets) and
prediction exchanges (event derivative exchanges) — Site Feed — CFM
@ Google Reader — Google
Advanced Search of the CFM site — Yahoo!
Search of the CFM site — Google
PageRank: 5/10
2. Midas
Oracle .ORG = Group blog
on event derivatives (traded bets), prediction markets (event
derivative
markets) and prediction exchanges (event derivative exchanges) — Site Feed — MO.ORG
@ Google Reader — Google
Advanced Search of the Midas Oracle .ORG
blog — Yahoo!
Search of the Midas Oracle .ORG
blog — Google
PageRank: 6/10 — Midas
Oracle Statistics — Kudos
3. Midas
Oracle .NET = Group blog
on event derivatives (traded bets), prediction markets
(event derivative
markets) and prediction exchanges (event derivative exchanges)
— Site Feed — MO.NET
@ Google Reader — Google
Advanced Search of the Midas Oracle .NET
blog — Yahoo!
Search of the Midas Oracle .NET
blog — Google
PageRank: 5/10 — Midas
Oracle Statistics — Kudos
4. Midas
Oracle .COM = Group blog
on event derivatives (traded bets), prediction markets (event
derivative
markets) and prediction exchanges (event derivative exchanges) — Site Feed —
MO.COM
@ Google Reader — Google
Advanced Search of the Midas Oracle .COM
blog — Yahoo!
Search of the Midas Oracle .COM
blog — Google
PageRank: 5/10 — Midas
Oracle Statistics — Kudos
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About CFM
Contact Chris Masse
- Phone
- +33 4-9365-4911
- 04-9365-4911
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- cfm |-at-| midasoracle |.|-com-|
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Chris F. Masse
Panorama B, Green Side
305, avenue Saint Philippe
Les Templiers, Sophia–Antipolis
06410 Biot,
Alpes-Maritimes
France,
European
Union
Disambiguation
- The Products
- traded bets; traded predictions; event
derivatives; event-driven
derivatives; event derivative contracts; information
derivatives; information derivative contracts.
- The Markets
- bet markets; betting
markets; event derivative
markets; information derivative markets; prediction
markets.
- The Exchanges
- bet exchanges; betting exchanges; event derivative exchanges; information
derivative exchanges; prediction exchanges.
- The Technology
- market-based technology; trading engine;
trading technology.
- Other Terms
- binaries; binary, European call
options; European binary options; binary event options; event
futures; event-driven futures; idea futures; information futures.
- Inappropriate Terms
- event
markets; idea markets; information markets; opinion
markets; predictive markets.
- Sub-Categories of Prediction Markets
- Decision markets are conditional
prediction markets intended (by some idealists) to be used as a
decision-making tool replacing human decision
makers;
- Decision-aid markets are conditional
prediction markets intended to be used as a decision-aid tool advising
human decision makers.
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