Presuming Bets are Bad

Justin Wolfers:

In recent months, there have been millions of dollars bet in options markets, as traders seek a big payday in the event that the economy heads south – and this hasn't raised an eyebrow. But when an Aussie bookie began offering bets on whether the Australian economy is headed for recession, he stirred up a bit of strife.  Federal Treasurer Wayne Swan called the bookie's actions "utterly irresponsible." The contrast between the Treasurer's response to financial trades and bookies' bets provides a nice example of how people respond differently, depending on how a bet is framed.
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