The University of Buckingham Press Journals
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Prediction Market for Disease Surveillance: A Case Study of Influenza Activity
No full textWe conducted a pilot study on the use of prediction markets to aggregate private information for disease surveillance. Influenza activity in Iowa, North Carolina, and Nebraska between 2008-2010 was forecast through prediction markets operated on the Iowa Electronic health Markets (IEhM). We found that prediction markets were well utilized by participants, and they achieved high level of forecasting accuracy as far as 4 weeks before actual influenza-level outcomes were announced. Trading activities indicate that new information continuously flowed into the markets during the trading window, which further improved prediction accuracy as contracts drew down to expiry. This project demonstrates that a prediction market is a practical infectious disease surveillance mechanism that provides low-cost useful information for public health administration in a timely manner
BREXIT AND THE UK OIL & GAS SECTOR
Get PDFOn 23 June 2016, the UK electorate voted in a referendum to leave the European Union (EU). This outcome is expected to have far-reaching consequences for UK industry, including the oil & gas sector. These include: short- to medium-term uncertainty; potential changes to legislation affecting the downstream industry; restrictions on the free movement of goods and people; effects on the gas market; and renewed impetus for Scottish independence. It is impossible at this early stage to reach any definitive conclusions regarding the consequences of Brexit to the UK oil & gas industry, but this short article will discuss certain issues that are likely to be of interest and relevance
Private Information, Overconfidence and Trader Returns in Prediction Markets
Get PDFIn lab experiments on the value of information in financial markets, groups of “insiders” are randomly chosen to receive perfect information. However, in typical (non-experimental) financial markets, investors often engage in extensive fundamental analysis, a process which may result in over-confidence in one’s private information. In this study, we examine trading volume, prices and trader returns in a set of four real money prediction markets where the values of securities are tied to a movie’s box office performance. Before the markets opened, every trader submitted a detailed forecast of the movie’s future performance. Therefore, all traders have self-generated private information, the accuracy of which can only be known ex-post. As expected, the volume and timing of trading were consistent with over-confidence. In three of the four markets, contract prices were consistent with the prior information equilibrium. In those three markets, traders whose forecast was associated with the winning contract had significantly higher returns than traders whose forecasts suggested that another contract would pay off. In the other market, there were no significant differences in returns across trader groups. This research suggests that when traders are overconfident and trade accordingly, there can value to being better informed if the information is accurate.
A Simple Decision Market Model
No full text Economic modeling of decision markets has mainly considered the market scoring rule setup. Literature has made reference to the alternative, joint elicitation type decision market, but no in depth analysis of it appears to have been published. This paper develops a simple decision market model of the joint elicitation type, that provides a specific decision market nomenclature on which to base future analysis. A generally accepted prediction market model is modified, by introducing two additional concepts: “proper information market” and “relevant information”. Our work then provides original contributions to the theoretical discourse on information markets, including finding the sufficient and necessary condition for convergence to the best possible prediction. It is shown in our new prediction market model that “all agents express relevant information” is a sufficient and necessary condition for convergence to the direct communication equilibrium in a proper information (prediction) market. Our new prediction market model is used to formulate a simple decision market model of the joint elicitation market type. It is shown that our decision market will select the best decision if a specific selection and payout rule is defined. Importantly, our decision market model does not need to delay payment of any contracts to the observation of the desired outcome. Therefore, when dealing with long-term outcome projects, our decision market does not need to be a long running market. Future work will test for the statistical significance of relevant information (identified as important in our idealized decision market model) in laboratory and real world settings.
Is There A Relationship between Participation in Gambling Activities and Participation in High-Risk Stock Trading?
No full textThe purpose of the present study was to investigate whether or not there is an association between engaging in traditional forms of gambling and engaging in high-risk stock trading and, if so, to examine game play patterns of high-risk stock traders, as well as identify any socio-demographic similarities or differences between the two groups. Logistic regressions on data from two large Canadian data sets were undertaken to examine which variables best differentiate traditional gamblers from high-risk stock traders. The results indicate that high-risk stock traders have a higher frequency of gambling, engage in a larger range of gambling activities, and are more likely to be problem gamblers. Additionally, the type of gambling activities that high-risk stock traders participate in suggests that they are a sub-group of skill-based gamblers who also prefer gambling on casino table games, sports betting, dog and horse race betting, and games of skill for money over chance based games such as electronic gaming machines, bingo, and instant win tickets. High-risk stock traders, compared to traditional gamblers were more likely to be male, have a higher income, be better educated, and to be of Asian or “other” descent, not be divorced, widowed or separated, and be self-employed or employed full-time. However, unlike other skill-based gamblers, high-risk stock traders tended to be older rather than younger, and had a high income rather than a low income
Bankroll management in large poker tournaments
No full textThis study focuses on bankroll management, defined as the process of determining the right fraction of the bankroll one should put at risk in a particular advantageous situation, examined in a poker tournament context. The aim of the study is to conduct a theoretical analysis of bankroll management based on the Kelly criterion in a typical large poker tournament, using the actual World Series of Poker Main Event payout table as an example of such tournaments. A main conclusion of this paper is that a long-term profitable poker player’s expected return on investment in tournaments (i.e., the level of advantage) does not provide sufficient information to obtain an optimal bankroll management policy for the player. The level of advantage is obviously an important factor, but the player’s strategic approach to the game, that is, if the player primarily tries to avoid finishing the tournament without a payout or if the player primarily tries to finish in the very top of the ranking, is also very important to consider
Trading Strategies and Market Microstructure: Evidence from a Prediction Market
No full textWe examine transaction-level data from Intrade's 2012 presidential winner market for the entire two-year period for which trading occurred. The data allow us to compute key statistics, including volume, transactions, aggression, directional exposure, holding duration, margin, and profit for each of 6,300 unique trader accounts. We identify a diverse set of trading strategies that constitute a rich market ecology. These range from arbitrage-based strategies with low and fleeting directional exposure to strategies involving large accumulated positions in one of the two major party candidates. Most traders who make directional bets do so consistently in a single direction, unlike the information traders in some canonical models of market microstructure. We present evidence suggestive of manipulation by a single large trader, and consider the possible motives for such behavior. Broader implications for the interpretation of prices in financial markets and the theory of market microstructure are drawn
UNIVERSITY OF BUCKINGHAM CENTRE FOR EXTRACTIVE ENERGY STUDIES
Get PDFThe University of Buckingham Centre for Extractive Energy Studies (UBCEES) offers a uniquely holistic approach to the study of extractive energy. This ranges from issues of good governance and accountability, combating corruption and asset recovery, on to the legal, fiscal and competition issues relating to the actual process of the extraction and carriage of energy resources and its environmental and social impact. It also explores contemporary issues relating to the exploitation and extraction of offshore energy from the sea, fracking, community and labour rights in the global extractive energy sector, including indigenous community participation in the decision-making process of the ownership and the sustainable management of energy resources
AFRICAN ‘SOCIAL ORDERING’ GRUNDNORMS AND THE DEVELOPMENT OF AN AFRICAN LEX PETROLEA?
Get PDFThis article interrogates the constitutional relevance of African social ordering rules in petroleum governance in Sub-Saharan African petroleum producing states. At the apex of the hierarchized African legal system is the national constitution which contains the basic norm or grundnorm derived from Western received law. Yet some African scholars have described African social ordering norms as grundnorms. This goes contrary to the conventional positivist position that “a legal system cannot be founded on two conflicting grundnorms.” This article will consider whether African social ordering norms have attained the level of a grundnorm as expounded in Kelsen’s pure theory. Utilising the Ekeh’s “two publics” model, it investigates how the basic norm for African social ordering grundnorms is presupposed.The article considers whether there is a conflict between the domanial system of state ownership as approved by African national constitutions and indigenous African social ordering norms premised on communitarianism. The article presents for analysis the recent study undertaken by African Petroleum Producers Association (APPA). This study considers whether it is possible to standardise the rules of petroleum contractual governance in Africa. This has led to some discussion on whether the standardisation of these rules could lead to the development of an African Lex Petrolea. This article explores the role that African social ordering norms can play in the development of a continent-wide Lex Petrolea.
ENVIRONMENTAL TAXATION IN THE UK: THE CLIMATE CHANGE LEVY AND POLICY MAKING
Get PDFEnvironmental taxation is different from many other forms of taxation as it is not only used to raise revenue but it is also able to marginally influence behaviour to protect and enhance the environment. It provides valuable market led mechanisms to help limit greenhouse gas emissions, encourage sustainable behaviour and improve environmental performance to address climate change. The Post Paris (COP21) agreement provides a framework for global actions to address climate change and this sets the context for the discussion of environmental taxation.Environmental taxes have enormous potential to change carbon usage. In 2012, the Coalition Government (2010-2015) opined that the definition of an environmental tax includes three principles, namely that the tax is explicitly linked to the government’s environmental objectives, that the primary objective of the tax is to encourage environmentally positive behaviour, and that the tax is structured in relation to environmental objectives, particularly the more polluting the behaviour the greater tax levied. The current Government has adopted and applied this definition. By way of contrast, the definitions of environmental taxation favoured by the Office for National Statistics (ONS) and the Organisation for Economic Cooperation and Development (OECD), respectively, give a wider remit for environmental taxation and policy making and include, for instance, various transport taxes which, as will be seen, do not fall within the Government’s definition of an environmental tax. The Climate Change Levy, which is the focus of this article, was introduced as one of a series of new environmental taxes on business energy use in 2001. It is charged on electricity, gas liquefied petroleum gas and solid fuels used by business.Generally, environmental taxes are intended to increase investments in renewable technologies while reducing carbon emissions, but they are vulnerable to political influence and policy changes. Thus, the rationale for environmental or ‘Green’ taxes has shifted perceptibly to raising revenue rather than enabling government to meet its obligations under the Climate Change Act 2008. Environmental taxes are also susceptible to oil prices and fluctuations in the global economy. The North Sea oil and gas industry is going through a difficult period of retrenchment. A recent independent report has suggested that the industry has two years to adjust to changing economic circumstances. Inevitably, this will impact on the tax revenues raised from this sector.In an ideal world, environmental taxes should be easy to avoid through a change in behaviour and, consequently, hard to evade. Environmental taxes provide important means to achieve policy objectives, but their full potential requires public support and, especially, engagement by the business community. The future of environmental taxes may depend on the success of ‘green’ investment. There is a case for introducing a single climate tax on business. Undoubtedly, environmental taxes deserve greater attention in the economic toolbox to meet climate change commitments. The UK faces some difficult policy decisions under the Climate Change Act 2008 to meet the 2030 energy and climate change package targets. Currently, the UK receives 7.5 % of tax revenue from environmental taxes. To date, environmental taxation has had mixed outcomes in the UK, though few doubt its potential to define the future of carbon based energy use.