LEANZ March 09 Wellington Seminar

Topic: Seeing the future: Prediction markets and the wisdom of crowds

Speaker: Matt Burgess, Chief Executive, iPredict

Date: Monday 23 March 2009

Venue: Level 17, Chapman Tripp, 10 Customhouse Quay, Wellington (please note that there is no access to the building after 6pm)

Time: Refreshments from 5:30pm, seminar at 6pm

RSVP: to: angela.bamford@bellgully.com (please note that an RSVP is not compulsory, but we would appreciate hearing from you if you plan to attend)


Prediction markets have been counted among the most intriguing institutional innovations of the last quarter-century. A prediction market is a share market for future events in any field, including politics, business, and social outcomes. Traders in a prediction market take a position on the likelihood or expected outcome of a future event. The market price that emerges from trading is the prediction, and reflects the wisdom of the crowd.

In the twenty years since their invention in the United States, prediction markets have developed an extraordinary forecasting record and have outperformed every competing forecasting institution, most notably election polling. Prediction markets have several characteristics that give them strong advantages over rival forecasting methods. They are robust to manipulation, they require only a few traders to produce excellent forecasts, they can be run using real or play money, and market-based forecasts are a low cost alternative to polling, experts and group deliberation.

Matt Burgess describes what prediction markets are and their history, shows that they are one example of a recent harnessing of the wisdom of crowds, compares their performance to a range of alternative forecasting methods, and looks at the performance of New Zealand’s real money prediction market iPredict since its launch in September 2008.


    Matt Burgess is the Chief Executive of iPredict, the real money prediction market owned by Victoria University and the Institute for the Study of Competition and Regulation (ISCR). He is a Research Associate at the ISCR.

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Here are some sites that we like to read.

New Zealand econ/social science sites

Aaron Schiff.


Brennan McDonald.


Economics New Zealand.

Economics Today.


Fair play and forward passes.

Gareth Morgan.

Groping to Bethlehem

Not PC.

NZAE blog.

Offsetting behaviour.

Peter Winsley.

Prod Blog (NZ Productivity Commission).

Rates Blog.

Roger Kerr.

Sex, drugs, and Economics.

Small Torque (John Small).


Waylaid Dialectic.

UK Economics

The Enlightened Economist.

Flip Chart Fairy Tales.

John Kay.

Long and Variable.

Mainly macro.

Martin Wolf.

Money Supply.

NIESR’s blog.

Stumbling and Mumbling.

Uneasy money.



Calculated Risk.



Economist’s View.

Equitable growth (Brad Delong).

Greg Mankiw.

Grumpy Economist.

Institutional Economics.


Marginal Revolution.

Market Monetarist.

Money Illusion.


Paul Krugman.

Stephen Williams.

Supply-side liberal.

Updated Priors.

Worthwhile Canadian Initiative.

Micro/Industrial/Political economics

A fine theorem.

Economists do it with models.

Intersection of Anthropology and Economics.

Ipredict blog.

Keplerian Finance.

Magic, Math, and Money.

Oil price blog.

Understanding Society.

Economics aggregation/papers

Econ Academics.

Econ Journal Watch.

Economics Roundtable.

Engaged Social Science.

NEP-DGE blog.

The Dismal Science.

Statistics Fun

Econometrics Beat.

Econometrics by simulation.


Simply Statistics.

Stats Chat.

Statistical modelling, causal inference, and social science.

Three-toed sloth.

Quandl blog.

Other New Zealand sites


Gather and Hunt.


Public Address.

Education Directions.