Bryan Caplan  

I Bet An Austrian

Malevolent Aspirations... The Rational Liberal Minister...

Austrians have strong philosophical objections to the application of probability theory to most of the real world, but that didn't stop Walter Block from publicly offering to bet at 200:1 odds that Ron Paul will be elected president:

Can't happen? Give me some odds on a bet. (According to some polls, the odds against Ron winning are 200-1). I'm willing to put up $1 against the $200 of all suckers, sorry, I meant takers, that my favorite Texas Congressman will win.
I took the bait, on the condition that I could blog it: I've bet my $200 to Walter's $1 that Ron Paul will not be the next U.S. president.

You're all witnesses!

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COMMENTS (11 to date)
Mike Linksvayer writes:

You could've gotten better odds (36:1) at Intrade.

jsalvati writes:

There haven't even been 200 American presidents.

Mike Linksvayer writes:

Oops, scratch my comment above. 36:1 is for the R nomination only.

SheetWise writes:

Mortimer Duke: How could you do this to us after everything we've done for you?
Billy Ray Valentine: Oh, see, I made Louis a bet here. See, Louis bet me that we couldn't both get rich and put y'all in the poor house at the same time. He didn't think we could do it. I won.
Louis Winthorpe III: [grinning] I lost... One dollar.
Billy Ray Valentine: Thank you, Louis.

John Hall writes:

This is unfortunate Bryan, you're not thinking like an economist. What about the opportunity costs?

a guy writes:

So... it seems like a hedging bet. You get at least 1$ in case Ron Paul doesn't win.

Matt writes:

It's a good hedge. If he's serious about cutting taxes, Bryan stands to keep at least $1,000 more per year and probably much more. $200 one time is a pittance.

However, by betting did he actually reduce his long-term wealth by lowering the odds of a Paul victory?

Patri Friedman writes:

You can get 36:1 at InTrade for Paul winning the presidential nomination, so Walter is making a good bet unless Paul is 5:1 against winning unless he is nominated. Hard to know what those odds are - Paul might alienate the neocons, but he might also get some moderate Dem crossover. If he's the 40% to win of an average Republican, that puts him at 93:1. So Walter can make money by getting suckers like Bryan to give him 200:1, then go lay it off on InTrade. I like it.

Although to make a large enough bet to be worth my time, I'm afraid I might move the market on InTrade, so I don't think I'll try to arbitrage. Besides, Bryan might not be willing to lay $100K to win $500, just because he'll lay $200 to win $1.

Dezakin writes:

In the 2004 election I bet a couple hundred bucks that George Bush would win, because I thought he was the worst choice as a president and an incredibly strong personal distaste for the man. If Kerry won, I'd be out several hundred dollars but I wouldn't be depressed about the political leadership so the cost wouldnt bother me. If Bush won, I'd be depressed, but at least I'd have several hundred dollars in consolation.

The lesson for me after that was, if you're emotionally invested in a political campaign, allways bet against the guy you want to win. When he loses at least you get your money back.

shamus writes:

I think this is a good bet by Block. I'd but the odds at 40-1.

Erich writes:

Think of the Intrade-Block price difference as a premium since it makes for a better blog post than "I made a $35 bet on Intrade."

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