Re: poly: Correlation vs. Causation in Decision Markets

From: <CurtAdams@aol.com>
Date: Wed Oct 13 1999 - 21:01:28 PDT

In a message dated 10/13/99 10:56:27 AM Pacific Daylight Time,
rhanson@gmu.edu writes:

> In this situation, the speculators should reason that if the CEO is
> kept that probably means that the decision makers were in fact
> better informed than speculators, with private information favoring
> keeping the CEO.

Are the speculators figuring the board's knowledge into S and S'?
Since that's part of the dump event, it seems like it should be. If
we assume the board is rational and working for the benefit of
the company, then we could rephrase the problem as

S: price given the board thinks the company's better off keeping the CEO
S': price given the board thinks the company's better off without the CEO

Does that change anything?
Received on Wed Oct 13 21:03:00 1999

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