[extropy-chat] silent night

[Robin Hanson]

On 22 Dec, Harvey Newstrom wrote:
>Has anyone gotten any evidence that futures markets really can predict the 
>future?  I keep hearing the Iowa markets referenced as predicting 
>political elections, but I can't see it in their historical data.
>Everything I found seems to show bad results or regular flip-flopping to 
>the point that they don't predict anything.  I would sure love to see real 
>historical data showing predictions.

I pointed Harvey to a specific table in a specific paper with URL and on 31 
Dec, he wrote:
>But that doesn't change the fact that this is still an unpublished, 
>unfinished, draft manuscript, that has not been peer-reviewed or 
>reproduced by others.  Even if this is no one's fault, it still has not 
>yet reached the level of "proof" that you seem to ascribe to it.

I also pointed him to a paper of mine with cites to seven evidence 
papers.  He responded:

>>It is not my job to go look up every relevant item, and spoon feed you a 
>>URL or a quote,
>>and then explain them all via long emails.
>
>It is when you want to win an argument based on proof that you can't seem 
>to find at the moment.  ... If you can't quote it off the top of your head 
>as an expert in the field, ...  I am just surprised that nobody is using 
>this tool to predict future elections for great financial gain if they 
>really are working as expected.  i was l looking for a quick explanation 
>why this isn't happening, and haven't found one yet.  ...

Harvey initially asked for "any evidence", I point him to many papers, 
published in many different ways.  He complains that one of them is not 
peer-review published yet, and so doesn't count as "proof", and that the 
other papers don't count as "proof" unless I spoon-feed and explain them to 
him.

For the record, the relevant paragraph from my 
http://hanson.gmu.edu/moretrue.pdf is:
>Decades of research on financial markets have shown that it is hard to 
>find biases in
>market estimates. The few direct comparisons made so far have found 
>markets to be at least
>as accurate as other institutions. Orange Juice futures improve on 
>National Weather Service
>forecasts (Roll, 1984), horse race markets beat horse race experts 
>(Figlewski, 1979), Oscar
>markets beat columnist forecasts (Pennock, Giles, & Nielsen, 2001), gas 
>demand markets
>beat gas demand experts (Spencer, 2004), stock markets beat the official 
>NASA panel at
>fingering the guilty company in the Challenger accident (Maloney & 
>Mulherin, 2003), election
>markets beat national opinion polls (Berg, Nelson, & Rietz, 2001), and 
>corporate sales
>markets beat official corporate forecasts (Chen & Plott, 1998).



Robin Hanson  rhanson at gmu.edu  http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326  FAX: 703-993-2323