Friday, January 18, 2008
That's the ticket
I heard a recent story on the radio debating the merits of “political futures” markets as a predictor of this year’s presidential primaries. The idea is that while polls measure the past, futures markets gauge the future. But the futures markets have been a pretty cloudy crystal ball, as the Marketplace story explained:
During the primaries this year, the markets seem to be more reactive than prophetic. So maybe futures are not so good for betting politics. But what about sports?
Ticket futures provide a pretty accurate reflection of the conventional wisdom of fans. At Yoonew.com, which sells futures contracts on Super Bowl tickets, the price differences heading into this week’s championship games are stark. The asking price for a New England contract for a top-notch Super Bowl seat (lower level, between the 30-yard-lines) is about $6,500 as I write this. Asking price for the same seat for San Diego is just over $1,000. In the NFC, top-notch Green Bay contracts are available for $5,100, roughly twice the price of a Giants contract. The cheapest (and riskiest) way to get that primo seat for the Super Bowl is to bet on the two underdogs on a joint New York-San Diego contract. Price tag: $361.
So that's the conventional wisdom. But is it predictive? Like the oddsmakers, ticket speculators had the Colts as a heavy favorite last weekend. On the other hand, the gap between the Giants and Cowboys was not as wide as one might have guessed (I can't access the exact figure on the yoonew site, but I think the Cowboys price was a little less than double the Giants. And I don't think that's a New York bias shining through -- if any team would be likely to have a price inflated by its broad fan base, it would be Dallas.)
Anyway, for the gamblers and economists in 'Meat nation, this may warrant more investigation. At the very least, it's something to think about on a Friday afternoon.
"On Election Day in 2004 the Iowa Electronic Market priced John Kerry as the likely winner. On Election Day in 2006 Intrade put an 85 percent probability on the Republicans holding the Senate."
During the primaries this year, the markets seem to be more reactive than prophetic. So maybe futures are not so good for betting politics. But what about sports?
Ticket futures provide a pretty accurate reflection of the conventional wisdom of fans. At Yoonew.com, which sells futures contracts on Super Bowl tickets, the price differences heading into this week’s championship games are stark. The asking price for a New England contract for a top-notch Super Bowl seat (lower level, between the 30-yard-lines) is about $6,500 as I write this. Asking price for the same seat for San Diego is just over $1,000. In the NFC, top-notch Green Bay contracts are available for $5,100, roughly twice the price of a Giants contract. The cheapest (and riskiest) way to get that primo seat for the Super Bowl is to bet on the two underdogs on a joint New York-San Diego contract. Price tag: $361.
So that's the conventional wisdom. But is it predictive? Like the oddsmakers, ticket speculators had the Colts as a heavy favorite last weekend. On the other hand, the gap between the Giants and Cowboys was not as wide as one might have guessed (I can't access the exact figure on the yoonew site, but I think the Cowboys price was a little less than double the Giants. And I don't think that's a New York bias shining through -- if any team would be likely to have a price inflated by its broad fan base, it would be Dallas.)
Anyway, for the gamblers and economists in 'Meat nation, this may warrant more investigation. At the very least, it's something to think about on a Friday afternoon.
# posted by Budds @ 1:51 PM 
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Futures on sports games are pretty interesting...I'm sure there's an arbitrage between the numerous betting vehicles in sports. For instance, when I purchased tickets for Pats/Giants several weeks before the game, I was definitely concerned that the Pats would lose to the Dolphins in the week prior(like that would happen), so I considered buying a little insurance by betting against the Pats as a hedge (the value of my ticket prices would surely decline if the Pats lost). I'm sure there are similar transactions that you could engage in between ticket prices (as shown on ebay or stubhub), futures prices, and odds that would yield a riskless return. If we only had a bankroll to make it happen...
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