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Prediction Of Bird Flu A(H5n1) Outbreaks In Taiwan By Online Auction: Experimental Results

Author

Listed:
  • SUN-CHONG WANG

    (Institute of Systems Biology and Bioinformatics, National Central University, Jhongli City 320, Taiwan, ROC;
    Epigenetics Laboratory, Centre for Addiction and Mental Health, Toronto, ON, Canada M5T 1R8, Canada)

  • JIE-JUN TSENG

    (Institute of Physics, Academia Sinica, Taipei 115, Taiwan, ROC)

  • SAI-PING LI

    (Institute of Physics, Academia Sinica, Taipei 115, Taiwan, ROC)

  • SHU-HENG CHEN

    (Department of Economics, National Chengchi University, Taipei 116, Taiwan, ROC)

Abstract

The ability of accurate epidemic prediction facilitates early preparation for the disease and minimizes losses due to any strikes. We devised a platform on the Web for users to exchange their information/opinions on the possible avian flu outbreaks in Taiwan. The likelihood of the first human infection from bird flu in Taiwan in, say, December 2005 is securitized in the form of a futures contract. Incentives are introduced via a tournament: users trade the futures in the market on our Web server in order to win the awards at the end of the tournament. We ran such a tournament during the period between December 2005 and February 2006. The results of the futures' prices correctly predicted no outbreaks of bird flu among the residents in Taiwan during the 3-month period, suggesting that the design of the futures exchange on the Web be a potentially useful tool for event forecasting. Another crucial aspect of the experiment is that, associated with the price convergence, the transaction volume also quickly converges to zero, which is closely related to the famous no-trade theorem in theoretical economics.

Suggested Citation

  • Sun-Chong Wang & Jie-Jun Tseng & Sai-Ping Li & Shu-Heng Chen, 2006. "Prediction Of Bird Flu A(H5n1) Outbreaks In Taiwan By Online Auction: Experimental Results," New Mathematics and Natural Computation (NMNC), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 271-279.
    • Handle: RePEc:wsi:nmncxx:v:02:y:2006:i:03:n:s1793005706000567
    DOI: 10.1142/S1793005706000567
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