Vernon Smith on the housing bubble, Adam Smith, and libertarianism — [VIDEO]

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Vernon Smith is bullish on event derivative markets (a.k.a. prediction markets).

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Vernon Smith (via):

So far as new applications of derivatives markets I think one possibility is we may see more people making, creating derivatives markets, betting markets on policy, public policy outcomes. We&#8217-ve already seen that with regard to the Federal Reserve. There is a market now in which people are able to make, take positions on the likelihood of a change in the Federal Reserve Bank policy at their next meeting of the Federal Open Market Committee, so and these markets are concerned with the question of what the Federal Reserve Bank rate will be set at. So I think we may very well see more of these kinds of markets and this could very well provide some indication of how the participants in these markets evaluate some of the policy proposals that governments are making.

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Justin Wolfers [*] is the most cited prediction market economist

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Economist Rankings at IDEAS

#390: Vernon Smith &#8212- #644: Justin Wolfers

E-mail me if you think I forgot to spot a name in the list. (That could well be. There are so many names in the list.)

[*] I suppose that the other guy is somewhat associated with that result.

Previous blog posts by Chris F. Masse:

  • Robin Hanson fanboy and InTrade trader Patri Freidman’s outing —as one of the “sexiest geeks alive”
  • Is the mechanism outputting Justin Wolfers as the most cited prediction market researcher completely rotten?
  • COLD FUSION: Before you go trading on InTrade, do solve that, first —if you can.
  • Kudos to BetFair’s e-mail marketing team?
  • Conditional prediction markets about oil price and SegWay sales… Like the idea, Robin Hanson?
  • The Orb @ Texas Tech University
  • IS IT SAFE TO LOCATE A PREDICTION EXCHANGE NEAR A RIVER???