How the race to be Speaker of the House of Commons was won on Betfair

By Michael Robb
June 23rd, 2009

JOHN BERCOW was elected the next Speaker of the House of Commons on Monday having been the initial favourite on Betfair when betting began.

The Conservative, who lost all support in the betting and languished in third place Monday morning, went on to win after the expected challenge from Margaret Beckett failed to materialise.

Betfair spokesman Michael Robb said: “Betting on the next Speaker was extremely volatile over the weekend with all three of the main candidates having led the market at one point or other. It looked bleak for Bercow first thing on Monday and it appeared that the ‘Tories against Bercow’ brigade would get their way.

“The betting has been great to watch throughout and with Speaker Bercow now installed it’s a real shame we’re not going to have another market like this for at least nine years!”

A: Margaret Beckett enters the race on 10th June

B: Support for Bercow gathers pace as Labour members see him as the Tory of choice

C: Rumours of a ‘Stop Bercow’ campaign from the Tories sees support fade and Beckett take the lead, with support for Sir George Young on the climb amidst thoughts he could squeeze victory if Tories go for him over Beckett

D: Beckett speech not well received by punters and she goes on to finish a distant third. Bercow wins the final round of voting against Young and becomes the next Speaker of the House of Commons.

Tags: Betfair, Betfair Predicts, house of commons, john bercow, margaret beckett, michael martin, politics predictions, prediction exchange, Prediction Markets, sir goerge young, speaker election Posted in Blog, Politics, Prediction Markets, UK Politics |

The Ashes Predictions: Aussies well worthy of their favourites tag

By bettingbetfair
June 22nd, 2009

Forget World Twenty20, it’s time to look at the serious business of the summer. Ed Hawkins, writing on Betting@Betfair, has the lowdown on the the battle between England and Australia…

When England beat Australia in the memorable summer of 2005 to win the Ashes for the first time in 18 years, joy was largely unconfined among the gambling fraternity. At last, after years of betting heats no warmer than gazpacho, the urn had turned. Alas, a 5-0 thumping Down Under followed for England to dampen hopes of more even contests and with the sides preparing to join battle again on July 8th at Cardiff for the first of five Tests, Australia are shorter now than they were before a ball had been bowled four years ago.

There is more faith in this Australia side in the betting than last time, a side that included Glenn McGrath and Shane Warne. So why are England considered ready to burn when Australia have not only lost the two great architects of their fortress standing in the world game but Hayden, Langer and Gilchrist, too?

Refreshingly it is all down to form rather than reputation. Australia come into the eagerly awaited series in fine fettle while England are, well, no-one quite knows whether they are a decent side or not. And when that happens it is far easier to side with the gum-chewing, cocksure Aussies swaggering around like God’s children.

Australia had a post Warne and McGrath wobble, suffering series defeats to India away from home and then South Africa at home. It was the latter which suggested the Australia we all knew were finished. Their first home series loss for 16 seasons rocked them to the core and captain Ricky Ponting admitted that rebuilding could “take years”.

He might have been wrong. Two months after the end of that series Australia went to South Africa and produced a remarkable 2-1 victory. Hell, they even lost the dead rubber last game of the series, a trait of the old greats. The obituary had been written far too early.

It could be that Ponting will be proved right in England this summer but the evidence suggests otherwise. The key protagonists of the South Africa victory were not the old guard but young guys stepping up; Phillip Hughes, the opener, top scored with 415 runs and Mitchell Johnson, he of the piston and pump action, claimed 16 wickets.

Down came Australia’s Ashes price and back came a familar fear of a mismatch to the soundtrack of England supporters asking themselves: could our bowlers take 20 wickets consistently enough to win in South Africa?

The answer would have to have been no considering England were trying and failing to bowl West Indies out twice in the Caribbean, their confidence shattered by a chastening series loss in India and a home reverse to South Africa which had forced their own rebuilding programme. England have since beaten West Indies at home 2-0. But as a guide goes it is as close to useless as you can get given their opponents either had the mental or technical capacity to even make a fight of it.

What is key to remember is that before West Indies were sent packing, England had managed 20 wickets only once in 11 Tests, a statistic which does not damn them for this series but provides a better indication of where they are as a unit. Granted there is much to like about James Anderson and Stuart Broad but there are question marks over the rest. Graham Onions is a novice, Andrew Flintoff will deserve a knighthood if he lasts all five matches unscathed, Ryan Sidebottom has been fed a Test diet of Kiwis and West Indians and when Steve Harmison’s name is again being mentioned then you know the hosts are worried.

Australia’s bowling looks in better shape and that is all you really need to know when perusing the prices for a Test match series. Solve the riddle of which team will take 20 wickets most will make you rich.

The visitors get the nod, in the main, because of Johnson. He can swing the ball both ways at 90mph with his left-arm, making him the most dangerous bowler on the planet. But crucially he can bat at No 8 - he scored a century in South Africa - which will allow back-up bowling in the form of Peter Siddle, another 90mph swinger, more pace from Brett Lee and the potential for metronomic line and length by Stuart Clark.

If that makes Australia sound the more settled bowling attack, then job done.

Do beware that the potential for something unsettling; a stray cricket ball on the outfield in the warm-up, a captain losing the plot at the toss or something remarkable from a cocky young English batsman. It is beginning to sound like 2005 all over again. Just like four years ago, one thing you be sure of is this: it will be mighty close.

Tags: ashes 2009, ashes predictions, australia cricket, Betfair, Cricket, cricket predictions, england cricket, prediction exchange, Prediction Markets, the ashes Posted in Blog, Cricket, Prediction Markets, Sports, The Ashes 2009 |

John Bercow is favourite to be next Speaker of the House of Commons

By Michael Robb
June 19th, 2009

Five names in the frame for role, according to the betting…

John Bercow is the front-runner amongst Betfair customers to replace Michael Martin as Speaker of the House of Commons. The Conservative is 12-5 on the exchange to be elected on Monday.

Despite being favourite, his odds imply that he has just a 29 percent chance of getting the nod, suggesting some doubt clearly remains. Bercow’s closest challenge at the top of the betting is former Labour Minister Margaret Beckett, who is 3-1 (which implies a 25 percent chance).

Beckett is followed by Tory backbencher Sir George Young, who is 7-2 (22 percent), with Anne Widdecombe 7-1 (12 percent) and Sir Alan Beith 15-1 (6 percent). The other contenders are all 35-1 or bigger.

John Bercow is being described as a shoo-in in some corners of the press but that’s clearly not the case if the betting is to be believed. It’s one of five for the Speakership but with no overwhelming favourite it’s anyone’s call.

If you do think Bercow’s a cert there’s some real money to be made at 12-5!

Tags: anne widdecombe, house of commons, john bercow, margaret beckett, politics prediction markets, politics predictions, Prediction Markets, sir alan beith, sir george young, speaker Posted in Blog, Politics, Prediction Markets, UK Politics |

The Ashes Predictions 2009 Series Preview: The market looks about right at this stage

By Matt Kennedy
June 17th, 2009

Betfair Predicts’ Matt Kennedy gives us his take on what lies in store during The Ashes series between England and Australia this summer…

The Ashes is upon us after the extended break due to the seasonal difference between England and Australia. There is an air of uncertainty heading into this with both sides showing a very mixed bag of form heading into the series and many people thinking it poses a fantastic chance for England to claim a second victory in as many home series.

The market makes the away team favourites, affording Australia a 59% chance of winning the series, with England afforded a 27% chance and a 14% chance of a drawn series.

There is no shortage of negatives about the Australian outfit, most noticeably the loss of the vast majority of their previous Ashes winners. Amongst the absentees are the likes of Hayden, Langer, Gilchrist, Warne and McGrath. Any one of these players was a potential match-winner on their own and together their retirement is a huge blow to the Australian test team. A second negative is their poor performances in the T20 World Cup. Whilst many would argue that the two forms of the game are incomparable, their performances were nothing short of woeful and their bowling attack lacked any real clout. In any case, confidence cannot be high in the Australia camp.

Of those T20 bowlers who have made the test squad, Bret Lee will need to tighten up his line and length significantly. Shane Watson badly needs to regain some confidence as he looked beaten before he had even bowled a ball. There were, however, some signs of life, as Mitchell Johnson, who is improving with every game, started to look dangerous (his batting has also come on immeasurably) and Nathan Hauritz, although not in the same league as the mighty Shane Warne, is a competent spinner. Stuart Clark and Peter Siddle come in to bolster the attack but if any of them are not at the top of their game, they will undoubtedly be targeted by England’s middle-order, as Jason Gillespie learned the hard way in the 2005 series.

As far as Australia’s batting is concerned, they will be relying on Ricky Ponting and Michael Clarke to lead from the front. Neither have looked anywhere near their best recently and will need to get as much nets time in as possible before the first test. Brad Haddin is useful with a bat, however lacks the X factor possessed by his predecessor, Adam Gilchrist, who was one of the most damaging batsmen in world cricket. Michael Hussey gets his chance now having spent some years in the shadows of men such as Hayden and Ponting. He is an extremely talented batsman and I believe he will be a key man for Australia’s batting line-up.

So, it seems that there could be no better time for England to strike and take another home Ashes series. However, despite the above negatives, Australia’s team is strong in global cricket terms and it must be said that the majority of their team (particularly their batsmen) would cruise into the England test team. In addition, this team has shown that they can win tests by beating South Africa away from home. That is extremely strong form and a reproduction of those performances would Australia a tough nut to crack. It is this which justifies their high predicted chance of winning.

I believe that where this Ashes series will be won and lost is in England’s bowling attack. The 2005 Ashes was won because England had Steve Harmison, Andrew Flintoff and Simon Jones all bowing consistent lines at 90mph and above. As a result, there was no let-up for the Australian batsmen. A similar-styled line-up would cause problems for the Australian batting line-up. This is certainly a possibility with the likes of James Anderson and Broad looking like world-class bowlers and Flintoff recently making a successful return to the county scene. Much will depend on test squad/team selection and this could drastically affect England’s chances.

Of course, in addition to this, England’s batsmen must also deliver and have recently looked a tad hit and miss. However, the tests against West Indies showed that England are capable of building a total and the experience of Pietersen, Strauss and Flintoff in addition to the newer pleyers such as Bopara could prove and handful for the Australian bowlers.

With so many questions to answer (mainly, in my opinion, over the form of the majority of the Australian team and England’s team selection for the first test), an exciting and illuminating test series looks probable. My instinct is that the market has it about right and Australia’s powerful run in test cricket is likely to continue. However, England may well have been presented with an opportunity to strike at a time when Australia are not totally dominant. To take advantage they will need a near-faultless performance.

Tags: ashes prediction markets, ashes predictions, australia, Cricket, cricket prediction markets, cricket predictions, england, matt kennedy, prediction exchange, Prediction Markets, sport prediction markets, sports prediction, the ashes, The Ashes 2009 Posted in Blog, Cricket, Prediction Markets, Sports, The Ashes 2009 |

What do prediction markets, an article published in 1952, and the Babylonian Talmud have in common? And where does Don Quixote fit in?

By Leighton Vaughan-Williams
June 17th, 2009

“Believe me, no: I thank my fortune for it, my ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate upon the fortune of this present year: Therefore my merchandise makes me not sad.” So speaks Antonio in Act 1, Scene 1 of William Shakespeare’s ‘The Merchant of Venice’. Compare the injunction more than a thousand years earlier, of Rabbi Isaac bar Aha, contained in the Babylonian Talmud, that “One should always divide his wealth into three parts: a third in land, a third in merchandise, and a third ready to hand”.

Or more than a thousand years even further back, the rejoinder contained in chapter 11 of the Old Testament book of Ecclesiastes to “Divide your merchandise among seven ventures, eight maybe, since you do not know what disasters may occur on earth.” An alternative translation is to “…divide your investments among many places, for you do not know what risks might lie ahead.” I think you get the point that the principle of what we now call ‘portfolio diversification’ is not a new one.

So by the time Miguel Cervantes had Sancho Panza declare in ‘Don Quixote’ that the part of a “wise man [is] to keep himself today for tomorrow and not to venture all his eggs in one basket”, the idea was well established in literature. It took another 250 years or so, however, before the theory was formalized by a 25-year-old graduate student at the University of Chicago. His name was Harry Markowitz, and his paper, published in the June 1952 issue of the ‘Journal of Finance’ was called, simply enough, ‘Portfolio Selection.’

Essentially, Markowitz’s paper was a guidebook in preparing a ‘free lunch’, in the sense of reducing an investor’s risk without reducing expected earnings. The strategy was based around the construction of a portfolio of assets which balance out one’s exposure to risk, rather than reinforcing those risks. Take, for example, a mythical economy in which there are only two investment opportunities, umbrellas and sunscreen. If the weather is sunny and dry, the investment in umbrellas will perform poorly, and the investment in sunscreen well. If the weather is wet and dull, on the other hand, the reverse applies. By diversifying your investment between the two, you are reducing the volatility (one important measure of risk) of the returns from your investment.

Markowitz’s genius was extending this idea to devise a strategy for reducing risk without reducing expected returns, and making it mathematically tractable. It was to earn him a Nobel Prize in Economic Science in 1990. Markowitz was not thinking about prediction markets in 1952, but an interesting perspective on the whole concept of prediction markets is the degree to which they can provide a hedging function for pre-existing risks. For example, film studios might ‘sell’ (or ‘lay’) the success of their box-office receipts as a way of partially insuring their investment.

Similarly, a politician up for election can back his opponent as a way of insuring against a defeat at the polls, as can those likely to be adversely affected by the election of a particular candidate. And what happened to Antonio? For all his diversification, he hadn’t foreseen the apparent effect that the fickle finger of fate had unleashed on his far-off merchant ships, and before he learned the truth it had almost cost him a pound of flesh. If only he could have consulted a prediction market!

Tags: Betfair Prof, leighton vaughan williams, prediction exchange, Prediction Market Theory, Prediction Markets Posted in Betfair Prof, Blog, Prediction Market Theory, Prediction Markets |

Prediction Market Theory: What the 2009 Epsom Derby can tell us about the market, and about the ballot box!

By Leighton Vaughan-Williams
June 9th, 2009

The Betfair Prof, Leighton Vaughan Williams, takes a look at the ins-and-outs of the Epsom Derby…

The weight of opinion among the spokesmen of the major bookmakers, as reported on the morning of Epsom Derby Day, was that the John Oxx-trained ‘Sea the Stars’ would go off an even more sold favourite than he was in the early trading. And indeed, all the 7 to 2 soon disappeared, to be replaced on the bookmakers’ boards by 11 to 4, and by the time the market opened on course, that price (bar the odd 3 to 1 and 5 to 2 in places) was pretty much set in stone.

Meanwhile, Criterium de Saint Cloud winner ‘Fame and Glory’, available at a general 4 to 1 in the morning, opened on course at 7 to 2, touched 4 to 1 in places, and after frantic late trading, went off as 9 to 4 favourite. What happened? Well, an enormous late plunge, including one confirmed wager of £40,000 to win £110,000 might have had something to do it! All those 7 to 2 and 4 to 1 offers were soon wiped off the boards and market-watchers who like to follow in those bettors who unload the biggest satchels might perhaps have been forgiven for thinking the horse was home and hosed before it even exited the stalls.

In the event, the Montjeu colt performed creditably enough, and might well have benefited from a stiffer pace, but was never going to prevent Mick Kinane from following up his 2001 Derby success on Sea the Stars’ half-brother Galileo.

So what can we learn from this? Well, the consistent money pointed firmly in the direction of Sea the Stars. The money for ‘Fame and Glory’ was late and big, but from what we can ascertain derived from a few very large individual punts. Still, money is money, and prices in a market respond to the weight of it, wherever it comes from. But live, flesh-and- blood price-setters need not respond solely to the sheer relative volume of money about different horses, but also to what information the money is imparting. Would you as a price-setter respond in the same way to ten bets of £4,000, placed gradually throughout the day, as you would to one £40,000 punt three minutes before the off? And should you?

In the event, we know that the late and very large plunge came for the unbeaten colt that was already known to travel and to stay. And we were confirmed in our knowledge that he travels and stays. The only part of the triumvirate of qualities that wasn’t confirmed was his unbeaten status. If the market was like a ballot box in a first-past-the-post election, the winner of the 2009 Investec Derby and the winner in the market would, I judge, have been one and the same. But betting markets don’t work quite like ballot boxes. Most obviously, you can buy more than one vote.

And so the market got it wrong and the ballot box (most probably) got it right. Would that the same were always true in the world of politics!

Tags: Betfair Prof, Epsom Derby, fame and glory, horseracing predictions, montjeu, politics predictions, prediction exchange, Prediction Markets, sea the stars Posted in Betfair Prof, Blog, Horseracing, Prediction Market Theory, Prediction Markets |

Formula 1 Predictions: It’s Turkey time

By Matt Kennedy
June 5th, 2009

Betfair Predicts’ Matt Kennedy runs through the ins-and-outs of this weekend’s Turkish Grand Prix…

Saturday brings the Turkish Grand Prix in what, apparently, could be the final season of Formula 1 as we know it. As far as the market sees it, championship leader Jensen Button is likely to rack up his sixth victory of the season and extend his advantage. He is afforded a 37% chance of winning. If everything goes according to Ross Brawn’s script, as it has so far this season, another Button victory looks likely.

Button’s team-mate Rubens Barrichello (9%) is still looking for his first victory of the season. Button does seem to have the edge on him, but one can’t help but think that Barrichello will put his extensive experience to good use at some point this season.

Championship third, Sebastian Vettel (17%), has demonstrated that with the right car he easily has enough talent to take a Grand Prix and he can be expected to run Button close once again. If he managed to get in front from an early stage, he would be difficult to peg back. Team-mate Mark Webber (5.5%) tends to play second fiddle to Vettel, but would be a threat if finding his best form.

Whilst Button undoubtedly brings the best current-season form to this race, Felipe Massa (14%) boasts an impressive record at the Istanbul track, having won the past three Turkish Grand Prix. Ferrari turned in a better performance at Monaco than we have seen so far this season and Massa and team-mate Kimi Raikkonen (10%) could take some beating here.

Along with Ferrari, McLaren have also been struggling to find their form this season and, accordingly, Britain’s Lewis Hamilton (5%) and Heikki Kovalainen (< 1%) may well struggle to challenge for victory here. However, Hamilton is capable of getting the best out of his car and will be eager to get back on the points trail having crashed out in the qualifying stage of Monaco, so a respectable showing is not out of the question.

The Toyota pairing to Timo Glock (1%) and Jarno Trulli (2%) have looked recently like they have the potential to be a potent threat this season. However, they have just seemed to lack the ability to close a race out and have now, seemingly, regressed from their promising start and it remains to be seen if the can recapture their early-season form.

Amongst the rest, Nico Rosberg (1%) seems to be the season’s practise-session specialist and he clocked the fastest times yet again in Friday’s practise session. However, converting these fast times to race day seems to be beyond him, talented though he is.

The market predicts around a 50% chance of Brawn car finishing in front on Sunday, continuing their domination of the 2009 season. Whilst there is every chance of this being the outcome, I believe this could be closer than the market thinks, with the Ferraris and Red Bulls being the main threats to Ross Brawn’s race plan.

Tags: Brawn, Felipe Massa, Formula 1, Formula 1 Constructors' Championship, Formula 1 Drivers' Championship, Formula 1 predictions, jenson, Kimi Raikkonen, Rubens Barrichello, Sebastian Vettel, Turkish Grand Prix Posted in Blog, Formula 1, Prediction Markets |

Prediction Market Theory: Alice’s adventures in the looking glass world of prediction markets!

By Leighton Vaughan-Williams
June 1st, 2009

What’s Alice In Wonderland got to do with Prediction Markets? It’s a wonderful world, says Leighton Vaughan Williams…

When Alice journeyed through the looking glass, Lewis Carroll tells us, she came across a Queen who claimed to be “one hundred and one, five months and a day.” “I can’t believe that!” said Alice. “Can’t you?” the Queen said in a pitying tone. “Try again: draw a long breath and shut your eyes.” Alice laughed. “There’s no use trying”, she said: “one can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”

Well, there’s not space enough to consider six impossible things here, but let’s think of one, and it’s a big one. It’s the idea that market prices, be it the stock market or the Betfair market or any other person-to-person betting market, already incorporate and fully reflect all available information. And so you can’t beat the market, unless you get lucky.

Economists call this idea the ‘efficient market hypothesis’ and such a world as ‘informationally efficient.’ Now there’s a problem with this ‘looking glass’ world because in it nobody has an incentive to gather information. Why? Because information acquisition is costly and would add nothing to what can be obtained by simply looking at market prices. But if nobody acquires costly information, no trading will take place. And if nobody trades, what drives the market prices to incorporate and reflect all available information, i.e. what keeps the markets efficient?

It’s called the ‘information paradox’, first formalized in a paper published by Sanford Grossman and Joseph Stiglitz in 1980, called ‘On the Impossibility of Informationally Efficient Markets.’ The same applies if information is costless to obtain but there are trading costs. In the real world, of course, there are both information and trading costs, and we have a paradox in spades. But still we are told that the market is informationally efficient. Welcome to the looking glass world of modern financial economics!

So is there a solution to the paradox? Consider the case of a betting market about the age of the looking glass queen. Let’s say nobody knows but lots of people are making guesses, some better informed than others, and betting looking glass money on the basis of these guesses. The queen just hasn’t been telling. Now she has told Alice, and the market will be settled later in the day when she tells the same to the whole world, one in which impossible things really are believed.

Well, Alice has a little bit of time to place her bets before the rest of the world get to know the truth and if she’s clever she’ll bet enough to drive the market to the conclusion that the queen really is one hundred and one, five months and a day. And when the queen announces this is so, everyone will believe her. Alice will be rich, in a looking glass kind of way, and the queen will be not a day older. And the market will be efficient once again! And I think to myself, What a Wonderful World!

Professor Leighton Vaughan Williams is the Director of the Political Forecasting Unit and Betting Research Unit of Nottingham Business School, Nottingham Trent University

Tags: Betfair Predicts, leighton vaughan williams, Prediction Market Theory, Prediction Markets, the betfair prof Posted in Betfair Prof, Blog, Entertainment, Prediction Market Theory, Prediction Markets |

Prediction Market Theory: Would John McCain have raised taxes? There’s no need to guess. Just ask the prediction markets!

By Leighton Vaughan-Williams
May 20th, 2009

On September 4th, 2008, Senator John McCain of Arizona delivered his acceptance speech at the Minnesota-St Paul Republican convention as the party’s nominee for President of the United States. For a fleeting few days thereafter it looked as if he and his Alaskan running-mate might actually win the keys to the White House. Indeed, for a short while around this time, the respected political and election forecasting web-site, www.fivethirtyeight.com, had Mr. McCain as slight favourite to succeed George Bush, and the prediction markets were never to see it closer. For the record, Betfair traders were never quite as convinced as most others in the world of election forecasting, but it was getting closer.

It was quite reasonable, therefore, that on September 9th, Greg Mankiw, Professor of economics at Harvard University, should ask the prediction markets to reveal what kind of tax policy the US would get if John McCain should be elected President. We knew the Republican candidate’s stated policy, which was that of making the Bush tax cuts for the wealthy permanent. But what would he actually do if given the opportunity?

For this Professor Mankiw looked to an esoteric Intrade market about the likelihood of the top US income tax rate in 2011 exceeding 38%. He calls this the “Probability of a Tax Hike”, i.e. P (tax hike). It was already part of Barack Obama’s policy platform to introduce this scale of taxation, and politicians do not tend to under-state how much they are likely to increase taxes, and so given the very likely shape of the Congress, Mankiw attributed the probability of such a tax hike in an Obama administration as a sure thing, i.e. P (tax hike) = 1. Using a complementary estimate of the probability of Mr. Obama being elected President of 53% (0.53), he is able to create two new probability scores, i.e. P (Obama) = 0.53 and P (McCain) = 0.47. Now comes the interesting part of the exercise, which is the use of conditional probabilities to estimate the likelihood of the tax rise under a McCain Presidency.

The formula is straightforward. Probability of a tax hike , i.e. P (tax hike) = Probability of a tax hike GIVEN THAT Obama wins times the Probability of an Obama win, plus the Probability of a tax hike GIVEN THAT McCain wins times the Probability of a McCain win. Using conventional symbols, this can be written as: P (tax hike) = P (tax hike I Obama) P (Obama) + P (tax hike I McCain) P (McCain). We have numbers for all of these variables except for the probability of a tax hike by a President McCain. It’s a matter of simple arithmetic, therefore, to deduce what the prediction market says about the likelihood of this. It can be calculated as 0.87 minus 0.53 all divided by 0.47, or 72%. If we reduce the probability of an Obama tax hike from 1 to, say, 0.9, this simply increases the implied probability of a tax increase by McCain (in this particular case, from 72% to 84%).

So would John McCain have raised the top rate of income tax if he’d been elected? Well, the conditional probabilities have been consulted and they’ve given their answer. Yes he could have, and in all likelihood, yes he would have!

Tags: John McCain, leighton vaughan williams, Prediction Market Theory, Prediction Markets, the betfair prof, us politics Posted in Betfair Prof, Blog, Prediction Market Theory, Prediction Markets, RealClearPolitics, US President |

Betfair Market Prediction: Adam Lambert is the next American Idol

By Michael Robb
May 19th, 2009

Adam Lambert has as good as won American Idol 8, according to bettors on Betfair, the world’s biggest online betting community. Lambert is given a 76% chance of winning the show on Tuesday.

Already being claimed as one of Idol’s most talented contestants of all time, Lambert faces one final hurdle in the shape of surprise package Kris Allen. The Arkansas-born singer has a 24% chance of stealing victory.

Adam Lambert has been the bettors’ favourite since the market opened, having never been less than 28% to win after the first episode on March 11.

Kris Allen has done very well to get this far. The markets were heavily backing Danny Gokey to reach the final and Kris will want to ensure he makes his good fortune count.

Tags: adam lambert, American Idol, American Idol 2009, american idol 8, American Idol predictions, danny gokey, kris allen, simon cowell Posted in American Idol 2009, Blog, Entertainment, Prediction Markets |