Hobbit win correctly predicted - no octopus involved
iPredict, the prediction market launched in September 2008, has maintained its 90% accuracy record with its forecast that New Zealand would keep the Hobbit.
While the Prime Minister had been on record during the week saying chances were "at best 50/50", the iPredict market has priced the likelihood differently, chief executive Matt Burgess said.
"Our analysis shows that since the stock on the likelihood of 'The Hobbit' leaving New Zealand was launched last Friday, a total of 17,674 contracts were traded at an average price of 30c - suggesting that, on average, the market believed, through the week, that the chance of the films leaving New Zealand was only 30%," he said.
"Similarly, a total of 7,979 contracts were traded in the stock on the likelihood of increased government support for the movies, at an average price of 76c - suggesting a 76% chance of extra support.
"That both stocks accurately predicted actual events, before negotiations were even complete, gives us continued confidence in the forecasting power of iPredict." Mr Burgess boasted.
He gave a number of hypotheses as to why the market believed the movies were safe, ranging from suggestions on union-aligned blogs that "The Hobbit" issue was contrived for political reasons through to market confidence in Mr Key's ability to achieve a deal with Warner Brothers given his background in international business.
Mr Burgess also noted that iPredict had indicated a 99% likelihood that the Reserve Bank of New Zealand would leave the Official Cash Rate (OCR) unchanged at today's OCR announcement, and that the market had priced this likelihood at an average of 95% since the contract's launch on 15 September. The bank has announced this morning there will be no change to the OCR.
iPredict is owned by Viclink, the commercial arm of Victoria University of Wellington, and operates with authorisation from the Securities Commission.