Tuesday, July 29, 2003

investing in the future

Slate provides an explainer on prediction markets, like my beloved Iowa Electronic Market and the quickly-abandoned Policy Analysis Market that has caused such a stir today (see earlier weblog entries on both). I didn't realize there were so many of them! Indeed, there is an Irish gambling site that uses the market concept to allow you to bet on all sorts of interesting things beyond mere sporting events. I don't gamble for any kind of real stakes, so I won't be participating in that, but I will bookmark it approvingly as a source of all kinds of group-based probability estimates.

As an example, the Irish site is currently offering the opportunity to buy or sell shares for every state for the 2004 US Presidential Race. Right now, the only states that the market estimates that Bush has less than a 50% chance of winning are: California, Connecticut, Hawaii, Maryland, Massachusetts, New Jersey, New York, Rhode Island, and Vermont. The current spread on Bush winning is 64-67%.

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