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

[Brett Paatsch]

Robin Hanson wrote:

> Well the betting markets made a big reversal last night, from up
> to almost 75% in favor of Kerry, now down to a 5% chance for
> Kerry (even that looks too high, so I finally made my first election
> bet).
> 
> Of course we should expect this sort of reversal at least 1/4 of 
> the time, so one can't be too stunned.  But this does at least raise
> a small suspicion that theses markets were too volatile due to 
> over-confidence.

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?


> However, one case won't really show this - we have to look at
> statistics over many events to see if there's a trend.
> 
> In the end the important question is comparative - are there any
> other institutions that on average do better?  So far direction
> comparisons between markets and other institutions in the field
> have favored markets.  And real and play money have come
> out about the same.  But the jury is still out.

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.

Brett Paatsch