Hedging the Net Psychic Wealth

So the polls have Martha Coakley in free-fall, and even Nate Silver, who's been pretty pessismistic on Brown, says the FiveThirtyEight forecasting model puts Brown at a 3:1 chance of winning.  Intrade also has her at 25 cents on the dollar.

I confess, I can't quite believe it.  It's Massachusetts.  Teddy Kennedy's seat.  And special elections are notoriously difficult to poll--many of the results rely on educated guesses about the makeup of the electorate tomorrow.  I'm very tempted to take a flyer on Ms. Coakley's chances, at 3:1. 

And even if I thought those numbers were about right, it might make sense as a way to hedge my net psychic wealth.  If Scott Brown wins, I'm happy--and if Martha Coakley wins, at least I get $50 or so to drown my sorrows.

I'm a great believer in hedging emotional risks.  Betting against an outcome you really want is an excellent way to manage downside disappointment.  But in the case of the whole future of our nation's health care policy, I can't quite bring myself to do it.  Some risks are better off unhedged.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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