View From a Height
Commentary from the Mile High City
Wednesday, August 13, 2003

Collyvornia Follies

Dan Weintraub, over at California Insider reports that a group of left-leaning organizations is preparing to launch a campaign arguing that a) the recall is a waste and a bad idea, and b) the "current administration" has been good for the state. Right. That'll work.

If there has ever been any evidence that these groups are caught in the time-warp of their own arguments this is it. The first argument didn't work the first time, so let's try it again. Secondly, isn't it a little silly to think you can make the case for an administration when the leader of said administration is so toxic you're afraid to mention his name? Sure, this'll find some appeal with Democratic voters, but is it really going to motivate them to show up and vote, or just to stay home and stop toying with that knife that says "Gray Davis's Back" on the handle? Now that the thing is on the ballot, people just aren't thinking this way any more. Their eyes have been opened to other possibilities, and no amount of "wouldn't be good, wouldn't be prudent" is going to turn them around.

Also, the Irish betting site Tradesports has opened futures on who will succeed Gray, with one of the options being that the recall fails. (Go to Tradesports and click on Politics.) Arnold is a 3-5 favorite at this point. The futures basically are up-down on each individual candidate, among those of whom anyone outside their immediate family has heard. So this means that people are willing to pay $62 for a chance to win $100 if Arnold wins. He was up $9 today, while the #2 choice, Cruz, fell to less than $20, meaning he pays better than 5-1 if he wins. "Recall Fails" has also fallen to less than $20.

Information futures markets have been used to predict elections for a while. The Iowa Election Futures market has had notable success predicting both the share of the popular vote for presidential candidates, and the party share of the Congressional popular vote. But I'm skeptical of this one primarily because I believe it attracts a larger percentage of uninformed buyers, the kind whose money built replicas of Paris, Venice, and Egypt in that large Information Market in southern Nevada.

Why do I think this? First of all, the Iowa market, with so little money on the line, is going to attract political junkies. The promise of making real dough appeals to a much broader range of people. Also, the Iowa market asks the bettor to bet on percentage of the vote, something that requires more knowledge and thought than a simple "who'll win?" Lastly, most of the Iowa bettors are actually American voters. They know how they'll vote, they have a sense of how their neighbors will vote, and I suspect that these very local biases tend to even themselves out over a large composite like the country.

Uninformed bettors are much more likely to fall prey to trendy reporting, their own name-recognition biases, and rumor. Think about it. In most Arab countries, an information market in the number of unexplained disappearances of Arab children just before Passover would probably produce a nontrival result for a non-zero number. So bets from these parts of the world, assuming that they have both Internet access and the money to bet, should be somewhat discounted.

It'll be interesting to see how well Tradesports performs, but right now, I'm not holding my breath.

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