Thursday, August 13, 2015

Betting the Atlanta GDP Now, for example

The Atlanta processes economic reports and generates GDP growth to the nearest tenth, and the result is generally range bound to 3/4 of a point from the last value..  But there are likely thousands of bets, and thus many duplicates.  Hence, the clustering, of encoding of the bets.  So the Atlanta Fed will generat a 4 bit number, really, and only one of `16 clustered bets will pay off.

Looking at -pLog(p) for the bets p, probability, less than one, will be the number of bets that are clustered, and determine tha pay off. The GDP Now result arrives asynchronously, but its arrival time is known as betters know when economic reports arrive.

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