[extropy-chat] Re: peak oil debate framed from a game theory standpoint ?

[Robin Hanson]

At 12:27 PM 9/7/2005, Brian Atkins wrote:
>>So why are you not speculating in these markets to make all the money
>>you think is there to be taken.  Or are you also one of those fools?
>
>I'm sure there are plenty of "peak oilers" who are indeed already 
>spending their own money on futures, although I bet they also are 
>stocking up on gold and other end-of-the-world items.
>
>However, they seem to still be a small minority of the overall 
>market. The key question in my mind is: how useful really is it to 
>look to the current futures markets as key predictors of peak oil 
>when it seems that the majority (or "big money") players seem to 
>trade based on a six month or at most year out view?

The percentage of traders who think about a certain issue is just not 
an indication of how well market prices reflect that issue.  That is 
just not how these things work.  All it takes is for a small minority 
to think about the issue, and for everyone else to have no opinion on 
the issue.  Almost all relevant issues are only considered by a small 
fraction of traders.  That is good - it allows a division of 
intellectual labor.



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