InTrade was shut down by the Feds in 2013 and I was sad to see it go. InTrade was a prediction market. Prediction markets are powerful things. Futures markets are prediction markets. Economic theory for the ideas behind prediction markets can be credited to Friedrich Hayek in his 1945 article “The Use of Knowledge in Society” and Ludvig von Mises in his “Economic Calculation in the Socialist Commonwealth“.
Prediction markets can be incredibly accurate. Leigh Drogan uses prediction markets at Estimize. The estimize crowd consistently beats Wall Street analysts. For the past seven months, Estimize has been using the wisdom of crowds on economic releases and the crowd is beating the experts.
The reason InTrade was shuttered was money was being wagered on political elections. Someone in Washington didn’t like that. They don’t want to get the money out of politics and they continue to grow government at an ever faster pace, but they didn’t like the transparency Intrade brought. There still are the Iowa Prediction Markets, but they are too small. Prediction markets work best at scale.
The folks at Intrade are not deterred. They know a good idea when they have one and they have launched Pivit. It’s a new business model using the tried and true freemium model made popular by so many companies on the internet. (I will try to find a link later today.)
This is a good idea and I hope the people at Pivit are successful.
In Chicago, there is a startup using prediction markets within organizations. Inkling. They are also applying the concept to other things. The US National Holocaust Museum is using them for prediction of atrocities. (and they have a website). Pivit doesn’t have a website or app yet that I can find, but they have a good press agent.