Created Sun 26th Apr 4:43pm PST by 
risk
risk NOT replacing Geithner better for Economy?
Background: This will be judged Yes if Timothy Geithner is not replaced as Treasury secretary and the US economy does "absorb" the financial crisis by February 2010. Hence this question will be judged Yes only if the below two questions are judged as follows:
to be judged Yes: http://www.hubdub.com/m32375/Will_the_US_economy_have_absorbed_the_financial_crisis_by_Feb_2010
to be judged No: http://www.hubdub.com/m35062/Will_Tim_Geithner_depart_as_Secretary_of_the_Treasury_before_midnight_on_31_Dec_2009
This question exists as a counterpoint to another question:
Replacing Geithner to help economy?
Why do we need both questions? It's impossible to tell whether the choice of replacing Geithner has an effect on US economic prospects unless we have two contracts. The market will predict whether Geithner's replacement will help the economy or hurt it. You must use the prices of multiple contracts to compute the market prediction. Below is the formula. Variables are on a scale of 0-1, like probabilities, so a price of 25% = 0.25.
Let:
A = price of "Geithner to be replaced in 2009"
B = price of "Geithner replaced AND Economy to absorb"
C = price of "Geithner NOT replaced AND Economy to absorb"
D = B/A = the chance of Economy to absorb IF Geithner is replaced.
E = C/(1-A) = the chance of Economy to absorb IF Geithner is NOT replaced.
if E is less than D, then it is better for the economy to replace Geithner.
if E is greater than D, then it is better NOT to replace Geithner.
if neither, then it doesn't matter for the economy whether Geithner is replaced.
to be judged Yes: http://www.hubdub.com/m32375/Will_the_US_economy_have_absorbed_the_financial_crisis_by_Feb_2010
to be judged No: http://www.hubdub.com/m35062/Will_Tim_Geithner_depart_as_Secretary_of_the_Treasury_before_midnight_on_31_Dec_2009
This question exists as a counterpoint to another question:
Replacing Geithner to help economy?
Why do we need both questions? It's impossible to tell whether the choice of replacing Geithner has an effect on US economic prospects unless we have two contracts. The market will predict whether Geithner's replacement will help the economy or hurt it. You must use the prices of multiple contracts to compute the market prediction. Below is the formula. Variables are on a scale of 0-1, like probabilities, so a price of 25% = 0.25.
Let:
A = price of "Geithner to be replaced in 2009"
B = price of "Geithner replaced AND Economy to absorb"
C = price of "Geithner NOT replaced AND Economy to absorb"
D = B/A = the chance of Economy to absorb IF Geithner is replaced.
E = C/(1-A) = the chance of Economy to absorb IF Geithner is NOT replaced.
if E is less than D, then it is better for the economy to replace Geithner.
if E is greater than D, then it is better NOT to replace Geithner.
if neither, then it doesn't matter for the economy whether Geithner is replaced.
Settlement details:As reported on hubdub contract settlements.
Forecast history %
| Yes |
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| No |
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Question suspends in 10 weeks
- Activity: H$23,825 |
- Predictions: 9 |
Comments: 2
Get widget!Predictions (9)
frogchop
predicted No (H$10,000 at 84%)
bayoubear![[Admin]](http://www.hubdub.com/images/icon_admin.gif "This user is an admin"){kind=icon}
predicted Yes (H$300 at 20%)
predicted Yes (H$20 at 19%)
predicted No (H$100 at 77%)
sunwoopaik
predicted Yes (H$100 at 19%)Comments (2)
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score: 10
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