Wow. Under "politics," next to the "US Pres. Decisions" section I announced Friday, Intrade.com now has an "Impact of next Pres." section, with markets for conditional estimates of these four parameters:
- eco growth to be at least 2.5% over the next three years,
- unemployment rate to be less than 5% at end of 2011,
- number of violent crimes in 2010 to be less than in 2007, and
- Democrats to control House of Rep’s after 2010 mid-terms,
given each of these seven candidates: Clinton, Obama, Edwards, McCain, Giuliani, Huckabee, Romney. Cool! I don’t see any orders in these markets yet though, so it is hard to tell how much liquidity they will have.
Added: This is a research initiative of the University of Westminster.
9 Comments
Bets that don’t resolve for three years? The opportunity cost of locking away money becomes significant. Any chance they’ll allow you to cover your position with a government bond that matures at the right date so you don’t have to eat such a huge interest cost?
No Obama?
five? I count seven.
Clinton, Obama, Edwards, McCain, Giuliani, Huckabee, Romney
http://www.intrade.com/jsp/intrade/contractSearch/
So, I have ideas on who would be more effective at meeting these goals, but I’m not really sure how I would translate my thoughts into bets. Given that the contracts only pay out at 100 if the candidate wins AND meets the goal should I multiply my estimate of sucess meeting the goal by the estimate that they will win the election in order to determine my final bet? That seems right to me…
“five candidates: Clinton, Edwards, McCain, Giuliani, Huckabee, Romney.”
I count six.
Tom, oops – fixed. Obama wasn’t there before, but maybe they’ve added it; the intrade website is down at the moment – probably cyber-attacks from competitors; it really is a wild west out there.
I can finally connect to Intrade and no see Obama too – so have corrected text above.
Perhaps you should evaluate the potential for bias in your love of decision markets. Check out the markets failure to predict Clinton’s loss in Iowa and her success in New Hampshire.
What’s supposed to impress me here?
http://krugman.blogs.nytimes.com/2008/01/09/nobody-knows-anything/
I’m echoing Chuck. More efficient information aggregation should not be confused with more accurate price discovery. The latter is the real goal. I’m not convinced that a marketplace of ideas is NECESSARILY made more efficient by a marketplace of payoff derivatives on those ideas than by the same effort expended on trying to make the idea exchange more efficient in the first place.