Re: Tomas Palley on China

[raghu <mraghu01@xxxxxxxxx>]

> > >  How does one interpret Stephen
> > > Roach's "40% risk of a hard landing in 2006"?
>
> the sensible Bayesian interpretation would be that if you offered Roach a
> straight wager at odds of 5/2 or better he would take it.  I bet he
> wouldn't though.


That is an interesting thought. I guess this is similar to the ideas
behind the so-called prediction markets: the Iowa Electronic Markets and
the Hollywood Stock Exchange.

http://en.wikipedia.org/wiki/Prediction_market

It still seems a rather peculiar notion of probability. e.g. in what sense
is the winner of this years Oscar a random variable? Only in the sense
that the outcome while deterministic, is unknowable to non-insiders. So
non-insiders regard all unknown factors as if they are random and assign
probability measures to their beliefs. Such unknown factors may include
Acts of God and Acts of men more powerful or far away from the speculator.

--raghu.