A FUTURES MARKET FOR SWINE FLU.

A FUTURES MARKET FOR SWINE FLU. In THE WISDOM OF CROWDS, James Surowiecki tells the story about how a group of experts was formed to advise on the location on the ocean floor of a sunken submarine. The average of the estimates was much closer than any of the individual efforts. I posted here on how this kind of thinking is used in futures markets for elections or Oscar predictions. Hal Weitzman in the Financial Times had an article about how the Iowa Electronic Market has set up a futures market for predictions relating to the swine flu (H1N1). The experts who have been invited to trade in the market include “microbiologists, epidemiologists, physicians, emergency room personnel, nurses, pharmacists and health care administrators.” This link shows current trading on national issues. For example, the market currently thinks there is a 69% probability that will be enough vaccine to vaccinate 50 million people in the United States by November. This link (hit the “Current Markets” button) gives the current predictions for flu activity in North Carolina for the next four weeks. The traders have established a 77% probability that the flu will be widespread in the first week in November and the probability that it will be widespread is given estimates ranging from 80% to 83% for each of the remaining weeks in November.