Doug -
I'm going to be so glad when tomorrow is over. Either totally
disgusted and glad, or just normal cynical disgusted and glad. But
really glad.
And me, I'm just getting wound up!
Getting a little (morbidly?) fascinated by the prediction markets.
http://fivethirtyeight.blogs.nytimes.com/2012/10/24/oct-23-the-virtues-and-vices-of-election-prediction-markets/
Once the odds shift a little away from the middle in a winner-takes-all
situation, it seems like the markets would exaggerate the split...
The Iowa Markets are a "toy" market where it is *real* money, but not
REAL MONEY being layed down. But even with REAL MONEY on the line,
there seems to be some natural biases. Will people bet opposite their
vote? (otherwise) Fiscally Responsible Republicans seem likely to keep
their money on Mitt as a token show of support even if they (must?) know
they are going to lose it? Nate Silver's reference to
Favourite-longshot bias
<http://en.wikipedia.org/wiki/Favourite-longshot_bias> helped resolve
some of the paradox I was feeling.
I'm curious what this group thinks about these prediction markets?
1. Are they useful?
2. Are they unethical?
1. in Politics?
2. in Horrific Events?
3. Are they biased when US Citizens are presumably prohibited from
using them?
If I were an efficient markets purist, I might believe that they would
be extremely accurate and unbiased, and over time perhaps they will
become so, but while still young, there will continue to be "bargains to
be had" or "fools to be fleeced", depending on how you look at it.
- Steve
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