In spite of their inherent complexity, Jason Ruspini’s tax rate prediction markets show some liquidity.

Not surprising: plenty of good advanced indicators. (David Pennock, do take notice. :-D )

Jason “Avida Dollars” Ruspini’s tax rate prediction markets are finally accessible thru InTrade V2. Great. That allows me to publish dynamic charts, now. (With V1, there aren’t any.)

Highest Marginal Single-Filer Fed Income Tax Rate to be Equal or Greater than 36% in 2009 Tax Year

Price for US Individual Taxes 2009 at intrade.com

About Chris F. Masse

Founder and President of Midas Oracle
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3 Responses to In spite of their inherent complexity, Jason Ruspini’s tax rate prediction markets show some liquidity.

  1. Chris Masse says:

    Don’t mind this comment. I’m testing the comment system…

  2. In a addition to hosting a topic that people are interested in, having good contract rules, consistent market-makers with relatively deep pockets, and advanced indicators (newsflow at some frequency), the importance of contract design can’t be ignored.
    .
    Using the right contract design on Intrade often means the distribution of expectations may not be quickly interpreted. Chris Hibbert has noted that ladders are sometimes preferable to price bands because people generally have an idea of the direction prices are going, but may not care to place weighted bets in a number of price bands to express that directional view.
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    Leverage considerations are very important on Intrade. While a scaled claim outputs a nice mean expectation, it does not encourage a lot of trade in long-term markets because the payoffs are likely small. Essentially, with standard Intrade margining, scaled claims like the search engine contracts provide less leverage. If Google’s search share is 80% and I think it’s going to 90%, with a scaled claim I would be anticipating a 12.5% return on frozen margin, minus transaction fees. If this were a ladder or price band market, there is a good chance that i would be able to express this same view while anticipating a return in excess of 100%. With a scaled claim, if I think Google’s share is going to 85% from 80%, there may be no reason to trade a contract that’s one year out because the return is within my discount rate. This would of course be different if Intrade didn’t require full margin for such claims, which they shouldn’t, but I try to not make a lot of technical demands on them to support these still-small, untested market ideas.

  3. You’re on the right track, Jason. We will help you as much as we can.

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