[lbo-talk] Markets and the tooth fairy

Michael Pollak mpollak at panix.com
Thu Jul 31 09:53:34 PDT 2003


On Thu, 31 Jul 2003, Gar Lipow wrote:


> >The futures market in orange juice concentrate is a better predictor of
> >Florida weather than the National Weather Service. The Iowa Electronic
> >Markets outperform the opinion polls in predicting presidential
> >election vote shares. Hewlett Packard ran a market forecasting printer
> >sales that outpredicted any of its analysts.
>
> Does anyone know how true or false the above is? How reasonable is the
> comparison of prediction accuracy in these cases? Is this like the
> psychics who always boast of having predicted events after the events
> take place?

And who nevermind all the times they were wrong? It's impossible not to suspect that that's exactly what's going on since every litany only lists successes. Arguments like that cannot be taken seriously. I believe the fallacy is called "success bias."

Michael



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