Wednesday, April 11, 2007

Prediction Markets and American Idol

In a followup post on American Idol, if you are interested in forecasing who will be knocked off from week to week, trade sports has an interesting betting market here . They were right last week with Gina and this week they are predicting Lakisha by a large margin.

Prediction markets have tended to be more right than either polls or expert opinions. Why? Because they are functioning like an efficient market, where price reflects all known information. There are other markets (such as for US President, weather, economic data and sports) that are worth taking a look at.

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