Measuring Consensus in Binary Forecasts: NFL Game Predictions

Previous research on defining and measuring consensus (agreement) among forecasters has been concerned with evaluation of forecasts of continuous variables. This previous work is not relevant when the forecasts involve binary decisions: up-down or win-lose. In this paper we use Cohen¡¯s kappa coefficient, a measure of inter-rater agreement involving binary choices, to evaluate forecasts of National Football League games. This statistic is applied to the forecasts of 74 experts and 31 statistical systems that predicted the outcomes of games during two NFL seasons. We conclude that the forecasters, particularly the systems, displayed significant levels of agreement and that levels of agreement in picking game winners were higher than in picking against the betting line. There is greater agreement among statistical systems in picking game winners or picking winners against the line as the season progresses, but no change in levels of agreement among experts. High levels of consensus among forecasters are associated with greater accuracy in picking game winners, but not in picking against the line.binary forecasts, NFL, agreement, consensus, kappa coefficient

The Benefit and Cost of Winner Picking: Redistribution Vs Incentives

The Benefit and Cost of Winner Picking: Redistribution Vs Incentives |AB| A multi-divisional firm can engage in "winner-picking" to redistribute scarce funds efficiently across divisions. But there is a conflict between rewarding winners (investing) and producing resources internally to reward winners (incentives). Managers in winning divisions are tempted to free-ride on resources produced by managers in loosing divisions whose incentives to produce resources, anticipating their loss, are also weakened. Corporate headquarter's investment and incentive policy are therefore inextricably linked and have to be treated as jointly endogenous. The analysis links corporate strategy, compensation and the value of diversification to the characteristics of multi-divisional firms.Conglomerate, Internal capital market

Picking the Winners

We analyze the problem of choosing the w contestants who will win a competition within a group of n > w competitors when all jurors commonly observe who the w best contestants are, but they may be biased. We study conditions on the configuration of the jury so that it is possible to induce the jurors to always choose the best contestants, whoever they are. If the equilibrium concept is dominant strategies, the condition is very strong: there must be at least one juror who is totally impartial, and the planner must have some information about who this juror is. If the equilibrium concept is Nash (or subgame perfect) equilibria the condition is less demanding: for each pair of contestants, the planner must know at least one juror who is not biased in favor/against any of them. Furthermore, the latter condition is also necessary for any other equilibrium concept.Mechanism design, Social choice

Trade and the Competitiveness Agenda

The global economic crisis has forced a major rethinking of the respective roles of governments and markets in the processes of trade and growth. Indeed, industrial policy seems to be back in fashion—or, at least, talking about it is. But a renewed “activism” by government in the trade and growth agenda need not mean a return to old-style policies of import substitution and “picking winners.” Instead, it may mean a stronger focus on competitiveness by unlocking the constraints to private sector–led growth. This note discusses the renewed role of government in trade and growth policy from the competitiveness angle, and it suggests some priorities for the new competitiveness agenda.trade, competitiveness, financial crisis, growth, industrial policy, import substitution, picking winners, trade policy, exports, imports

Pros and Cons of Backing Winners in Innovation Policy

In the economics profession there is a fierce debate whether industrial and innovation policy should be targeted to specific sectors or firms. This paper discusses the welfare effects of such targeted policies in a third-market international trade model under imperfect competition. A theoretical case for picking winners through a preferential innovation policy is discussed, which is shown to hold without evoking retaliation from foreign competitors. However, in practice information uncertainties remain a concern. The question whether in this case ‘backing winners’ is a wise policy option depends on the characteristics of the information asymmetries and on the extent the government is able to design selection procedures in a way to minimize the transaction costs that may be caused from the market participants’ opportunistic behavior.Innovation policy; R&D subsidies, strategic trade policy, asymmetric information, spill-over effects

The First Amendment, the Courts, and Picking Winners

Dean Robert Post’s book—Democracy, Expertise, and Academic Freedom—reflects and requires serious thought about our First Amendment. This Essay addresses just two of the many interesting assertions Dean Post makes. The first is his claim that the advancement of knowledge in a democracy springs primarily from the knowledge that experts gather in discerning good from bad ideas, and that recognizing this value requires courts to develop criteria for determining which viewpoints are better in ongoing debates among experts. The second is Dean Post’s contention that the U.S. Constitution protects an individual right to academic freedom, which requires enforcing this right against academic institutions. The concern we have in each instance is with the role his theory assigns to courts in promoting some “experts” over others

New tensions and directions in Britain’s post-2008 industrial policy

Following the financial crisis, the UK’s industrial policy consensus, that liberally regulated competitive markets were assumed to best determine the composition of economic activity, has come under strain. Martin Craig argues British governments must overcome their aversion to ‘picking winners’ and embrace their discretionary role

The power of exports

The authors systematically document remarkably high degrees of concentration in manufacturing exports for a sample of 151 countries over a range of 3,000 products. For every country manufacturing exports are dominated by a few"big hits"which account for most of the export value and where the"hit"includes both finding the right product and finding the right market. Higher export volumes are associated with higher degrees of concentration, after controlling for the number of destinations a country penetrates. This further highlights the importance of big hits. The distribution of exports closely follows a power law, especially in the upper tail. These findings do not support a"picking winners"policy for export development; the power law characterization implies that the chance of picking a winner diminishes exponentially with the degree of success. Moreover, given the size of the economy, developing countries are more exposed to demand shocks than rich ones, which further lowers the benefits from trying to pick winners.Markets and Market Access,Economic Theory&Research,Access to Markets,Airports and Air Services,Tax Law

The Winner's Choice: Sustainable Economic Strategies for Successful 21st Century Regions

Throughout the second half of the 20th Century, urbanization, new technologies, rapid labor-saving productivity growth in primary industries, and improved highways combined to create large-scale rural-urban functionally integrated regions. These forces have raised the stakes for regions in their pursuit of economic development and growth, making successful regional policy even more important. Changes to the governance structures consistent with the increased interdependence within broad rural-urban regions will improve the region's competitiveness; adopting fad-based approaches and policies aimed at “picking winners” will be less fruitful. Going forward, continuing globalization and environmental sustainability have the potential to fundamentally reshape relative regional attractiveness.Regional Policy, Rural Development