Sunday, March 30, 2008

US Election Explainer of the Day

On Intrade, Al Gore defies the laws of probability;

Prob(Gore pres. | Gore nom.)
= 2.1%/1.7% = 123.5%

Therefore, if Gore is nominated, the probability he'll be elected president is 123.5%!


Robert said...

Clearly the alert rational investors think there is a positive probability that Gore will win the Republican nonomination or win as a write in candidate.

I noticed that Obama winds * Clinton wins > Democrat wins so, evidently, they rationally forsee that they too have a positive chance of winning as a third party candidate (oh nooooo did I mention that it is possible that Clinton will run as a third party candidate noooo it's uhm transactions costs which make markets look inefficient even if everyone is rational.

Robert said...

Obama wins + Clinton wins > Democrat wins. Economic agents are perfectly rational but some of us can't type.