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Liberal leader Justin Trudeau, left, has been gaining momentum in the federal election campagin at the expense of NDP leader Thomas Mulcair and Conservative Party leader Stephen Harper, according to Sauder’s Prediction Markets.

Chris Bolin/The Globe and Mail

The Globe's monthly roundup of research from business schools.

For a more accurate prediction of the outcome of the federal election next month, look to financial markets rather than opinion polls, advises Werner Antweiler, economics professor at the University of British Columbia's Sauder School of Business.

For the past 20 years, Dr. Antweiler has been running Sauder's Prediction Markets, an online futures market that allows investors to take positions on election outcomes. It's open to Canadian residents 19 years or older. And there's real money at stake: Participants must make an investment of at least $25 and no more than $1,000. The most a trader has made was $1,500 and the biggest loss was about $600, says Dr. Antweiler, although most investors tend to make a more modest gain of about $20 or $50.

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Sauder doesn't charge any commissions or fees and doesn't make a profit from the venture; all proceeds are paid out to investors. So far, the markets have more than 100 traders who have invested about $20,000.

There are four markets to invest in predicting the popular vote of the five major political parties, seat counts in the House of Commons, which party will get the most seats, and which party, if any, will form a majority government.

For Dr. Antweiler, the markets are both a research and teaching tool. His research has focused on the types of market participants, trader behaviour, who makes money, what factors drive liquidity and the accuracy of market predictions. His students learn about placing orders and how to take short and long positions.

So what are the markets calling for? As of mid-September investors were waging "that we are heading toward minority territory" in the Oct. 19 election, says Dr. Antweiler. "Traders are still allowing for the possibility of a breakout but it's not considered likely," he said.

The heaviest trading volume was seen in the days after the first leaders debate in early August and then in the days following the initial reports of the refugee crisis in Europe. "The market has been taking a different direction since then," he said, with the Liberal Party gaining momentum at the expense of the NDP and Conservatives. "Of course there's still weeks to go," says Dr. Antweiler.

Sauder's markets have consistently predicted election results as well or better than pollsters. One reason is that financial markets are forward looking by nature and can react quickly to major events whereas polls are usually two or three days old by the time they are published, Dr. Antweiler explained. In the 2013 British Columbia election, the polls had consistently predicted an NDP victory but Sauder's Prediction Markets correctly sensed a change in the public mood and on the last day of trading had started to favour a Liberal win, he noted.

Using foods high in sugar, fat as rewards can lead to obesity in children

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You're late getting out the door and your six-year-old isn't co-operating. You know it isn't the best parental decision you've ever made but you offer him a treat if he agrees to obediently put on his shoes and get into the car. What's the harm in that?

A study co-authored by Laurette Dubé of McGill University's Desautel Faculty of Management suggests there could be long-term consequences to these types of actions, especially if they become a regular routine.

The study involved the parents of 207 children between the ages of 6 and 12. The parents were asked to complete a questionnaire of what their child had eaten over the past month, how frequently the child had consumed different types of food and typical portion sizes. They were also asked how often they used foods that are high in sugar and fat as a reward or to encourage good behaviour.

An analysis of the data found that the children of parents who frequently used these foods as an incentive consumed more fat, sugar and calories than those whose parents used them infrequently. The study also found that the effect was more pronounced in boys than girls.

"The paper is essentially saying [to parents]: 'Pay attention,'" warns Dr. Dubé, marketing professor and scientific director of the McGill Centre for the Convergence of Health and Economics, a multidisciplinary research centre that focuses on global health concerns. It's not just the ubiquity of these types of food or advertising campaigns that are causing kids to consume more of them. "Our influence as parents matters as well," she says.

She notes that people are born with a biological predisposition for foods that are high in fat and sugar. When parents use these foods as rewards, it reinforces that natural preference. Over the long term, it can have adverse consequences on children's nutrition and could lead to obesity, she warns.

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Dr. Dubé notes that boys tend to be more high-reward seekers and more responsive to external incentives than girls.

The study is available online in the journal Eating Behaviors and will be published in a forthcoming print issue of the journal.

Consumer-generated content poses dilemma for firms

In this new era of crowdsourcing, consumers play an ever-increasing role in modifying products and creating content. This makes customers a valuable source of innovation for firms. How should firms manage the intellectual property that their customers produce?

Tread carefully, warns a study by researchers at Simon Fraser University's Beedie School of Business in Burnaby, B.C. If organizations manage the process poorly, "the financial and legal consequences could be severe," the study warns.

Take a hard line and claim it as your own and you could run the risk of alienating your most creative consumers. On the other hand, there is the potential for firms to lose control over the revenue-generating potential of these innovations.

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The paper says that innovations are "creations of the heart and the head," meaning that creators often have an emotional attachment to their ideas and designs. "Managers should work hard at understanding the value of emotional property, because getting it wrong can have disastrous legal, financial, and reputational consequences for the firm," the researchers write.

The paper was published in the Summer 2015 issue of the California Management Review. It was co-authored by Beedie researchers Jan Kietzmann, Ian McCarthy and Leyland Pitt along with Pierre Berthon at Bentley University in Waltham, Mass.

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