It opened not long ago, find it here, as I write it's at 33.9 for passage before July and it has been rising from 20 or so. Bernanke, by the way, is back up to 93.
A betting market for the health care plan
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Also interesting to note that cap & trade (passage before 12/31) has been on a steady slide from over 55% (in July) to about 20% currently.
http://data.intrade.com/graphing/jsp/closingPricesForm.jsp?tradeURL=https://www.intrade.com&contractId=674142
For purposes of this contract a healthcare reform bill is considered one of the following:
- The Affordable Health Care for America Act (H.R. 3962)
- The Patient Protection and Affordable Care Act (H.R. 3590)
- A bill reconciling the differences between the two bills named above
Those are the bill that the House passed and the bill that the Senate passed, respectively.
I’m not defending, I’m asking.
Infomation auction markets work good for somethings, and maybe less well for others. Charlie Plott’s work at Caltech involving an estimate of the sales of an HP computer by an internal auction market within HP elecited private information of value: the shipping clerk probably new they would never get the stuff out the door, or the sales guy knew the forecast was too low but liked his superior to believe otherwise because he would get a bonus.
Similarly, information markets might work better than polling on citizen voting matters. In effect, each agent (a bidder) polls all the people around him before making the trade on Intrade.
But, as to the passage of legislation, where the voters on intrade are basically not trading on inside knowledge, but just on the basis of what they here on television and read in the paper….hmmm….I would rather rely on the opinion of a well informed lobbyist or some staffers.
Opinions may vary. What’s yours. Fama didn’t get the Nobel, did he?
Hey, it looks like there’s some money that can be made from uniformed or careless econmists!
Dan, thank you. You posted what are the contract terms for the Intrade healthcare bet:
“For purposes of this contract a healthcare reform bill is considered one of the following:
- The Affordable Health Care for America Act (H.R. 3962)
- The Patient Protection and Affordable Care Act (H.R. 3590)
- A bill reconciling the differences between the two bills named above”
Now, ask yourself when you make that bet: what is the set of healthcare options that you bet on. You probably thought HR 3962, HR3590 and the conference or reconciliation report. So, say you thought the probability of this combination was 40%; so naturally, the opposite is no healthcare bill as defined, which would be 60% chance of not passing. That’s the way Tyler interpreted the odds of healthcare not happening.
Give me access to some good staff people on the Hill over Intrade any day of the week.
But, is that correct: what about piecemeal bills, what about a new compromise bill, what about a bill coming through the reconciliation process….?
There could be some easy money to be made, but, promise, don’t tell anyone, because we need people to believe the world is A or non-A, and if the set of things is bigger, too bad for them. Good for me though.
One other point: if you thought 40% probability was likely 6 months out, what could intervene that would disrupt Congress and put things on hold. Did you consider that in your estimate? So, what would happen if there were a terrorist plot tomorrow, or a big crash on wall street and Congress puts this on hold.
Regarding thin markets and Intrade, you might want to look at thin markets in commodities and other products to answer your question. Any experience there?
I do know that for a time, cheese was traded on what was called the Wisconsin Cheese exchange. Typically, 4 carload lots or less determined the national price of cheese. Prices were not volatile, farmers complained about the prices, as did smaller cheesemakers. At some point, there was an investigation, and cheese was moved to the Chicago exchanges. Prices became more volatile, more buyers, more sellers, fewer complaints.
Now, if the person who responded to PBR saying the entire value of the trade win for everyone amounted to the value of a car, and I were a lobbyist trying to convice a Senator not to vote, and I saw I could influence the odds….how much would it cost me versus how much could I make going back to my client saying that I convinced the Senator not to take the risk and vote.
Don’t know. You know more about this than I do.
I can’t understand why people won’t simply wait for the outcomes. Optimal predictions are often wrong ex post. Too much nervous energy out there.
Lest you think that a free version of Intrade would be a better solution for people playing just for pride, well, one of the earliest sites on the Internet was founded to do just that, about 15 years ago, by one Robin Hanson. It’s the Foresight Exchange. Trouble is, it is also thinly traded and languishes in obscurity, with little evidence of significant predictive power in the absence of any profit motive.
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