Betting markets in everything

by on November 20, 2011 at 3:57 pm in Economics, Education | Permalink

A new website is assembling what it calls “the world’s best economics department” in a bid to give prominent academic economists a louder and unfiltered voice in key public-policy debates.

The site, run by the University of Chicago Booth School of Business, plans to pose one question a week and post answers from 40 senior professors at elite U.S. universities. The site went live Sunday, though the panel has been responding to questions for the past few weeks.

Alas, I cannot check the “weblogs” category for this post.  The David Wessel article is here, the website itself is here.  Let’s bet: pick your metric, how many site visits (or whatever) will they be pulling in six months from now?  I bet Scott Sumner beats them with one hand tied behind his back.

Corey November 20, 2011 at 4:18 pm

The site’s not working for me. Anyone else having this problem?

Nishant November 20, 2011 at 4:53 pm

It took a while (about a minute) to load for me, but it worked in the end.

Newman November 20, 2011 at 4:34 pm

” in a bid to give prominent academic economists a louder and unfiltered voice in key public-policy debates.”

Here’s a stupid question, how much voice should economists count in policy decisions? The fact that you can find an economist to back virtually any view to fit a political agenda tells me that although economics can inform policy decisions, the value of the input is undermined by the widely divergent opinions.

The stimulus was a typical example; politicians use the economists to validate their prescription and then when it doesn’t deliver the economists post-mortem is “oh the downturn was worse than we thought”… “no one could have foreseen the severity…” Or the always popular Krugman “I was right, you just didn’t spend enough money.”

There doesn’t seem to be any penalty for bad advice.

Evan November 20, 2011 at 7:05 pm

Many things in economics are ambiguous, but in some cases things are very clear cut. Look at the answers to this question, for example. http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_eM6AbvcBTI8MuvG

This is where economists can be very useful – educating the public on matters where many people have incorrect viewpoints.

dan1111 November 21, 2011 at 9:26 am

I think it’s the classic problem of relying on experts. The problem is not that the experts are useless; it’s that the general public doesn’t have the ability to evaluate their competing claims. If I need advice from an economist, or I need to hire an economist, how can I tell who is a good one? This effect reduces the “penalty for bad advice” and lowers the quality of experts overall. Relying on the consensus of experts is also no good. 20% of the experts could be right and 80% wrong. Everyone could be wrong if mistaken assumptions are built into the field and become a qualification for entry. And again, the general public can’t evaluate such things.

This is why the ability to clearly communicate ideas to the general public is such a crucial skill for experts.

It is also why intentionally complex communication is the sign of a bad expert.

jk November 20, 2011 at 6:32 pm

Ugh, I don’t want to see Krugman have a more weighted vote than his cult following.

jk November 20, 2011 at 6:49 pm

I’m also wondering if there is conflict of interest clause that they have to attest toward as some of these researchers may be consultants to governments or business.

DW November 20, 2011 at 7:47 pm

If they were good enough writers, they’d already have a voice.

EMH, baby.

Frank November 20, 2011 at 8:53 pm

There is such a thing as technological change.

DK November 20, 2011 at 10:13 pm

The site is great. Academic lunacy documented and exposed. Hope they keep it for long enough for all to see what these experts are worth.

Frank November 20, 2011 at 10:25 pm

Just looked at the website. Experts? Experts on what? Surely few know anything about international trade and/or can’t read English.

I am genuinely sorry, but what a flop.

Evan November 20, 2011 at 10:51 pm

Are you referring to the ‘Buy American’ question or the ‘Exchange Rates’ question?
What would you answer, and why? Why do you think the experts are wrong?

Donald A. Coffin November 20, 2011 at 11:57 pm

Interesting panel. Are you offering an even-money bet on Sumner’s blog, or do you have odds? (In either case, I would NOT take that bet.)

Donald A. Coffin November 21, 2011 at 12:02 am

Interestingly, on this question”
“Question B: Plausible expectations of future dividends, discounted using a plausible risk-adjusted interest rate, explain well the level of stock prices for recently listed internet businesses in 1999.”
the panel seems to be strongly anti-efficient-markets-hypothesis (at least I think that’s how to interpret their vote, 0% agree, 48% disagree, 28% strongly disagree).

dan1111 November 21, 2011 at 9:02 am

My favorite part is that they can vote “uncertain” with varying levels of confidence. One respondent can be extremely confident that he is uncertain. Another can be uncertain whether or not she is uncertain.

Contemplationist November 21, 2011 at 10:31 am

Yes Bentley should create a Scott Sumner chair of Monetary Economics and let SS …chair it.

Silas Barta November 21, 2011 at 12:38 pm

How is this a betting market? Any damn fool can prognosticate; betting markets are supposed to differ in that they put real money on their predictions, not just spout signaling-laden “advice”.

JWatts November 21, 2011 at 1:32 pm

That’s a good point. I would assume if the Professors had to stake significant money on their outcomes that their results would be more creditable. At least the results of those that won money versus those that lost money.

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