[extropy-chat] Re: Now Bush to win 1.5:1

[Mike Lorrey]

--- Brett Paatsch <bpaatsch at bigpond.net.au> wrote:

> 
> I don't follow. I don't get how you are thinking of
> "over-confidence".
> If you are speaking with your economists hat on could you please
> elaborate a bit. 
> 
> I'd have thought that efficient markets would be indifferent to
> "over-confidence". 
> 
> How could "over-confidence" have produced too much volatility?

a) Some players in the markets cared more about creating public
perception that could create PR synergies rather than whether or not
the lost money. If you still have $20 million in your campaign chest on
election morning, are you going to buy more ads, or try to tweak the
markets to convince people that you are the winner?

b) Coin tosses are the most volatile markets around, you are either
winning or losing.

c) Polls being produced by so many sources, of such varying quality and
accuracy, and in many cases, commissioned to try to invent PR
synergies, left the bayesian market clouded by FUD, produced by
disinformation and imprecise measurement. When you are trying to guage
a winner by trying to decide who is lying less, you have a very
volatile market.

> 
> I honestly 'reckoned' at the time that I posted that Kerry was more
> likely to win. (I don't think so now). 
> 
> I didn't bet real money myself. I wrote at the time another email
> that I kept but didn't post that my reckoning at the time when I
> thought
> Kerry would win because I wanted to see if there was meritorious
> method in it afterwards regardless of whether or not Kerry won. 
> There's no value for me in being right by just luck.  
>  
> Anyway, I have long thought that real money would make me and
> others a lot more serious about our predictions. I'd be very
> interested
> in a finding to the contrary as its SO counter-intuitive. 
> 
> Do you really think real and play money have come out the same?
> That would be extraordinary I think.

Depends on how much you bet. A gentlemans bet of $10 isn't going to
mean anything. If you bet $1000 I think you'd put a lot more rational
analysis into making a good decision.

=====
Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                      -William Pitt (1759-1806) 
Blog: http://www.xanga.com/home.aspx?user=Sadomikeyism


		
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