alt Hacker NewsSame. I consider myself extremely fortunate to have been able to take a course on the Economics of Gaming from William Eadington [1] , who was the founder of Gambling Studies.
Our final in 2008 consisted of two parts: predicting the electoral outcome of the Presidential election of each state where each state represented one percentage of our grade, and then a wager from 1-50 percentage points on whether the stock market would rise or fall the day after the election.
I wrote on the class message board that the only way we could possibly "win" the outcome of the stock market wager was to collude as a class. I also argued that placing a wager on the outcome of something that was inherently unpredictable shouldn't be used to calculate a grade. He agreed that collusion was a reasonable approach to the problem, but didn't budge on the unfairness of introducing wagers into a grading equation. What was a university in Nevada going to do? Sanction the founder of the field of study for the source of a large part of their revenue?
It was an excellent class, and I think a lot of the negative externalities of gambling that Nevada has reckoned with for nearly a century now are going to rapidly surface across the country as a whole unless this freight train is reined in somehow.
Growing up in Nevada, I think my relationship to gambling seems to be a lot like Europeans' relationship with alcohol - one of familiarity and temperance. We have some hard lessons ahead, and an unbelievable amount of financial incentives against putting this cat back in the bag.
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+1 please explain (and tell us your bet & final grade!!)
>Our final in 2008 consisted of two parts: predicting the electoral outcome of the Presidential election of each state where each state represented one percentage of our grade, and then a wager from 1-50 percentage points on whether the stock market would rise or fall the day after the election.
Explain this more? Let's assume you're Nate Silver and predict the 50 state outcome perfectly - you have a 50% in the class, so failing? Then the only way to "win" is to wager 50 points on the stock market (doesn't matter which way it goes). Wagering less makes no sense, because you start at 50 and so going "up" 25 to 75% protects nothing as the downside is still way below failing.
It sounds like a game theory question - you should be able to get 40 points on the states easy enough even if you get the toss-up ones wrong, and then gamble the full total on the stock market (which in general should go up, the market loves certainty and hates uncertainty).