Forecasting the outcome of closed-door decisions: evidence from 500 years of betting on papal conclaves

Vaughan Williams, Leighton; Paton, David

Abstract

Closed-door decisions may be defined as decisions in which the outcome is determined by a limited number of decision-makers and where the process is shrouded in at least some secrecy. In this paper, we examine the use of betting markets to forecast one particular closed-door decision, the election of the Pope. Within the context of 500 years of papal election betting, we employ a unique dataset of betting on the 2013 papal election to investigate how new public information is incorporated into the betting odds. Our results suggest that the market was generally unable to incorporate effectively such information. We venture some possible explanations for our findings and offer suggestions for further research into the prediction and predictability of other ‘closed-door’ decisions.

Citation

Vaughan Williams, L., & Paton, D. (2015). Forecasting the outcome of closed-door decisions: evidence from 500 years of betting on papal conclaves. Journal of Forecasting, 34(5), 391-404. doi:10.1002/for.2339

• Journal Article Type: Article
• Acceptance Date: Feb 23, 2015
• Online Publication Date: Mar 22, 2015
• Publication Date: Aug 31, 2015
• Deposit Date: Dec 18, 2018
• Publicly Available Date: Feb 19, 2019
• Journal: Journal of Forecasting
• Print ISSN: 0277-6693
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 34
• Issue: 5
• Pages: 391-404
• DOI: https://doi.org/10.1002/for.2339
• Keywords: Management Science and Operations Research; Strategy and Management; Statistics, Probability and Uncertainty; Modelling and Simulation; Computer Science Applications
• Public URL: https://nottingham-repository.worktribe.com/output/1421334