Square Kilometre Array contract

Suggest three contracts so that both likelihood of NZ-Aus winning and likelihood of a 2012 decision being made is measured.

SKA.NZAU

Australia-New Zealand to win hosting of Square Kilometre Array

This contract pays $1 if Australia-New Zealand wins hosting of the Square Kilometre Array. Otherwise this contract pays $0.


Decision must be definitive and announced by a person holding suitable authority. If there is no decision before the start of 1 January 2013, then this contract will pay $0. If it is announced that no definitive decision will be made in 2012 then this contract will immediately close at $0.

Joint hosting: if both South Africa and Australia-New Zealand are awarded hosting, this contract will pay $1 if it is planned Australia-New Zealand will host the majority by number of measurement instruments, $0 otherwise.

New Zealand excluded: If New Zealand is excluded from the Australia-New Zealand hosting arrangement, this contract will pay $1 if Australia is awarded hosting, subject to other conditions.

Appeal: This contract will immediately close based on a definitive announcement by the controlling agency even if an appeal of the decision is announced by any party.

If the arrangement is revised then this contract will follow the revised arrangement.

iPredict reserves the right to delay closing to seek clarification on any matter.

SKA.SA

South Africa to win hosting of Square Kilometre Array

This contract pays $1 if South Africa wins hosting of the Square Kilometre Array. Otherwise this contract pays $0.



SKA.OTHER

Pays $1 minus payouts from SKA.NZAU and SKA.SA

Not sure of the need for the Aus/NZ split provision. Note that South Africa is not the only country that would be part of their bid, so it seems if you're going to have an Aus/NZ split then you should be fair and have a similar split provision in the other contract.

I'm not sure why including this detail matters though: the organisers essentially have 2 choices for locations, Aus or SA, the specific countries involved don't really matter.

Hmmm, ok.

The interesting question from the NZ perspective though (I think) is whether NZ will be part of the arrangement, but perhaps the better way is to break it into two contracts

a) will Aus win

b) if (a) occurs, will NZ be in the Aus arrangement

Alternatively, doing it with one contract I guess would ask: will SKA telescopes be installed in NZ, whoever wins. That., admittedly, is the secondary question from the overall project's perspective.

What do you think?

I think two contracts is redundant, as the outcome of b is almost certainly going to trade at the same price as a. You end up simply splitting the liquidity.

I'm happy for the question to be whether the telescopes are installed in NZ. It is definitely a secondary question, but I believe it's so closely tied to Australia winning the contract that for all intents and purposes it's the same thing.

Of course it is also possible that NZ could be ruled out for various technical reasons and Oz still go ahead, so this could increase volatility and potentially make it a more interesting stock.

Not sure about the motivation for including SA, but perhaps a better approach would be

1) NZ included in collaboration.
2) SA included in collaboration, but NZ not.
3) Neither NZ nor SA included in collaboration.

The fact that if NZ is involved it will be AUS based means that in reality 1) will trade at the prob for Australia to host it, just a matter of wording.

I would be interested in a secondary question if NZ is included in the collaboration - whether an established political party will mount a protest over the land use.

Perhaps it could be run later, or perhaps the bid has already liased with the appropriate authorities on this and hence rendering a stock on land use redundant.

Just a thought anyway.

I wouldn't imagine any political party would protest the land usage.

Once this is built it'll be the largest telescope on the planet, probably for quite a long time (been in planning since ~1990) and the full computer technology to process the data hasn't even been invented yet.

Being involved in such a project will bring prestige as well as jobs to NZ, both for the construction and the on going science work. It's also a lot less polluting than a dairy farm. If anything, the Greens would get behind such a project because the existence of telescopes in an area will tend to inhibit other commercial development in the local vicinity due to radio interference, while the telescopes themselves have a marginal environmental footprint.

Well I didn't say it would be the Greens objecting.

I still think it could be a useful stock to run, my reading of this fact sheet suggests they haven't precisely determined where these things will go, and are relient on factors such as radio quietness etc, which would suggest they aren't going to be right next door to major civilisation.
This gives a rough indication of potential sites however.

It's quite possible it would go on defense land somewhere and there be no issues, but that would be the point of running a stock.

Alternatively you could broaden the stock from 'political party' to 'interest group' and make it conditional that they publicly object.

Anyway just an idea for down the line.

Yeah, I think 'interest group' would be better than just a political party.

I know you didn't specify the greens, but I can't imagine any of the other parties objecting to it. Like I said, prestige and jobs are on the line.

Any progress on this becoming a stock? The announcement is due early 2012 so would be timely to get it up and running.

Any chance of this being launched?

There was an interview with a guy who is leading the bid for NZ this morning on Nine to Noon: [www.radionz.co.nz]

Contract launched, thanks for the bump.