Prediction Markets

I mentioned awhile ago the book, The Wisdom of Crowds, and came across it again while reading the Hardball Times. IF you don't remember the gist of the book is that individuals don't always make the best decisions but groups of people generally do. My favorite example is a jar of jellybeans, typically no one individual can guess the right number but if you take all the individual guesses and average them the value is generally pretty close to the actual number and usually better than any individual guest. Few years ago DARPA, I believe, wanted to put out a stock market like tool so people could bid on terrorist activities. It would be a tool to highlight potential targets...although meaning well the tool got ridicule (for obvious reasons) and never took hold. Anyway the Hardball Times article looked at Vegas over/under odds for 2007 (unfortunately I didn't get to Vegas to place a bet!). Here are the numberS:

New York Yankees 97.5 Los Angeles Dodgers 91 Boston Red Sox 93 New York Mets 90.5 Los Angeles Angels 89.5 Philadelphia Phillies 89 Detroit Tigers 89 St. Louis Cardinals 86 Chicago White Sox 88 Atlanta Braves 85 Toronto Blue Jays 87 Chicago Cubs 84.5 Oakland Athletics 87 Milwaukee Brewers 83 Cleveland Indians 85 San Diego Padres 83 Minnesota Twins 83.5 San Francisco Giants 79 Seattle Mariners 81 Houston Astros 78 Texas Rangers 78.5 Florida Marlins 77.5 Baltimore Orioles 76 Arizona Diamondbacks 77.5 Kansas City Royals 65 Colorado Rockies 75.5 Tampa Bay Devil Rays 65 Cincinnati Reds 74 Pittsburgh Pirates 72.5 Washington Nationals 64

Once again they have those Dodgers winning 91 games...I just don't see it but let's see how it plays out this year. Anyway wikipedia has a great article here