The QV stocks, asking where in the country residential house prices would fall most, closed today in a rare tie between two binary stocks.According to QV, residential property prices fell by 8% in both Auckland and Christchurch in the year ended December 2008.
So, for the first time, we had to convert the binary stocks to indexed, then judge Auckland and Christchurch stocks at $0.5000 each. Wellington closed at $0.
These QV contracts are a nice example of what makes prediction markets interesting - at least from my perspective. That perspective is from somebody who doesn't have even the first clue about property values. Running a prediction market contract gives me, and anybody in a similarly ignorant position, to find out from people who actually know about residential property, the best possible view about what is most likely to happen.
These contracts were a first for another reason, which is that they were sponsored by our friends at SuburbWatch. Check them out - if you're interested in timing the market and getting in at the bottom, this site can help.
