January 6, 2008
Posted by Jay Livingston
There’s been some discussion of prediction markets at sociology blogs like Statistical Modeling and Scatterplot. Prediction markets are like stock markets: in stock markets, investors are betting on the ultimate price of a stock; in prediction markets they are betting on the outcome of events like elections, Academy Awards, American Idol, or when the US will start withdrawing troops from Iraq.
The collective wisdom of the investors is reflected in the price of the different options. If you want to buy shares in Obama as the Democratic nominee, you have to pay a higher price now than you would have three days ago.
The question is whether that collective wisdom has more predictive power than do the so-called experts.
Sports betting is essentially a prediction market. The odds or the betting line reflects the collective wisdom of the bettors (or “investors” – the term applied to people who bet on stocks). I blogged about this a year ago, and I came down on the side of the experts – the bookies and oddsmakers who set the initial line.
Yesterday’s NFL games offered a good example (i.e., anecdotal evidence) of what I meant. The oddsmakers made the Seahawks a 4-point favorite over Washington. But the public bet Washington, and the line came down to 3. The Seahawks covered easily, winning by 21. The crowd lost.
The Steeler game was an example of the worst-case scenario of following the “wisdom of crowds.” The Jaguars opened as 1 point favorites. The public bet them heavily, and by game time, the line was 3. If you had bet the Jaguars early in the week, you would have given up one point. But suppose you had waited to see wisdom of the crowd. You see the line going up, you see that the collective wisdom is heavily in favor of the Jaguars, and on Saturday you put down your bet, giving the Steelers 3 points.
The Jaguars won but by only two points. Following the wisdom of the crowd turned a winning bet into a losing bet. (That was cold comfort for us Steeler fans, who may have won our bets but saw our team lose a heartbreaker.)
In today’s games, the 3-point line on the Bucs and Giants hasn’t moved, at least not as of this morning. But in the Chargers-Titans game, the public has been favoring the Chargers. The line opened at 9 and is now up to 10 at most bookmakers. If you believe in the wisdom of crowds, you bet the Chargers. If you think the oddsmakers are smarter than the public, you bet the Titans plus ten points.
I Must Be Getting Old
January 5, 2008
Posted by Jay Livingston
The subject line of the e-mail was “sociology major.” The sender’s name was completely unfamiliar. Here’s the text in its entirety (I’ve changed the name):
It’s hard to say why I found this so off-putting – at least not without sounding stuffy and authoritarian. But as Ali G might put it, “Yo, respeck.”
Posted by Jay Livingston
The subject line of the e-mail was “sociology major.” The sender’s name was completely unfamiliar. Here’s the text in its entirety (I’ve changed the name):
hey mr livingston - i am a sociology major named raoul flynn - i am having a lil problem and i need your help with something - can i please make an apointment to come see you whenever you are free as soon as possible if ya can - thank you
It’s hard to say why I found this so off-putting – at least not without sounding stuffy and authoritarian. But as Ali G might put it, “Yo, respeck.”
Iowa: Self-fulfilling Prophecy
January 3, 2008
Posted by Jay Livingston
Why Iowa?
As Gail Collins says in today’s New York Times,
In part, it’s self-fulfilling prophesy, and the media play a central role. The media coverage makes the caucuses more important than they should be. The media stories focus far more on the horse-race aspect than on policy. They pay far more attention to who’s ahead and why than to substantive positions of the candidates. The result, like that of a horse race, is framed in the language of winners and losers. I’m sure there are good organizational, contextual reasons for media coverage being what it is, but the result is to magnify the importance of Iowa, with its 7 electoral votes, and New Hampshire with four.
Pennsylvania has three times as many electoral votes as Iowa; California has nearly 14 times as many as New Hampshire. But candidates aren’t spending collectively $14 for every person of voting age in those states. Spending per Iowa caucus-goer is closer to $300.
So all the news tonight and tomorrow will be about who won and who lost. Candidate X will not just be the person who got the most Iowa caucus votes; he or she will be “a winner.” Those who got fewer votes will be tarred as “losers.”
Those labels probably won’t directly affect the views of voters in other states. But they will affect how the media cover the candidates. And most important, the winner/loser distinction will affect the money people. As John Edwards (quoted in Collins’s column) says, “The winner of the Iowa caucus is going to have huge amounts of money pouring in.”
Because the media think Iowa is important, it in fact becomes important: self-fulfilling prophecy.
What would happen, I wonder, if the media paid as little attention to the Iowa caucuses as they do to the preferences of some other non-representative aggregate of a few thousand people? Or what if the candidates and media gave that other aggregate the attention they give the Iowa caucusers? How about the 60,000 people in my zip code? Hey dude, here’s my $300 of ad money?
Posted by Jay Livingston
Why Iowa?
As Gail Collins says in today’s New York Times,
The identity of the next leader of the most powerful nation in the world is not supposed to depend on the opinion of one small state. Let alone the sliver of that state with the leisure and physical capacity to make a personal appearance tonight at a local caucus that begins at precisely 7 o’clock.It’s not supposed to, but it does.
In part, it’s self-fulfilling prophesy, and the media play a central role. The media coverage makes the caucuses more important than they should be. The media stories focus far more on the horse-race aspect than on policy. They pay far more attention to who’s ahead and why than to substantive positions of the candidates. The result, like that of a horse race, is framed in the language of winners and losers. I’m sure there are good organizational, contextual reasons for media coverage being what it is, but the result is to magnify the importance of Iowa, with its 7 electoral votes, and New Hampshire with four.
Pennsylvania has three times as many electoral votes as Iowa; California has nearly 14 times as many as New Hampshire. But candidates aren’t spending collectively $14 for every person of voting age in those states. Spending per Iowa caucus-goer is closer to $300.
So all the news tonight and tomorrow will be about who won and who lost. Candidate X will not just be the person who got the most Iowa caucus votes; he or she will be “a winner.” Those who got fewer votes will be tarred as “losers.”
Those labels probably won’t directly affect the views of voters in other states. But they will affect how the media cover the candidates. And most important, the winner/loser distinction will affect the money people. As John Edwards (quoted in Collins’s column) says, “The winner of the Iowa caucus is going to have huge amounts of money pouring in.”
Because the media think Iowa is important, it in fact becomes important: self-fulfilling prophecy.
What would happen, I wonder, if the media paid as little attention to the Iowa caucuses as they do to the preferences of some other non-representative aggregate of a few thousand people? Or what if the candidates and media gave that other aggregate the attention they give the Iowa caucusers? How about the 60,000 people in my zip code? Hey dude, here’s my $300 of ad money?
Provost Humor
January 2, 2008
Posted by Jay Livingston
No, that subject line is not an error or oxymoron.
If you want to start the new year with a chuckle, try this at Inside Higher Ed. It's a testimonial for Henry Fenton, Assistant Provost at U of All People. In the first line, Fenton is identified as having been a sociology instructor, which is about the only reason I kept reading. But I'm glad I did.
I had never heard of the author David Galef, but the article bio has him at U of Mississippi. (Galef? Galef? Funny, you don't look Mississippian.) And IMDB has a David Galef acting in the 1971 movie "Who Is Harry Kellerman and Why Is He Saying Those Terrible Things About Me?" with Dustin Hoffman. That film was written by Herb Gardner, who may well have been an inspiration for Galef.
Posted by Jay Livingston
No, that subject line is not an error or oxymoron.
If you want to start the new year with a chuckle, try this at Inside Higher Ed. It's a testimonial for Henry Fenton, Assistant Provost at U of All People. In the first line, Fenton is identified as having been a sociology instructor, which is about the only reason I kept reading. But I'm glad I did.
I had never heard of the author David Galef, but the article bio has him at U of Mississippi. (Galef? Galef? Funny, you don't look Mississippian.) And IMDB has a David Galef acting in the 1971 movie "Who Is Harry Kellerman and Why Is He Saying Those Terrible Things About Me?" with Dustin Hoffman. That film was written by Herb Gardner, who may well have been an inspiration for Galef.
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