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In fact, gambling is an analogy that is constantly used in economics textbooks.
John Maynard Keynes -- arguably the father of much of modern economics -- wrote in the 1930s that financial markets are like "beauty contests" where punters would bet on who, after all opinions had been tallied, was going to be deemed the most beautiful girl.
So, he went on to say, people didn't invest in stocks or instruments that seemed to them to be the most "beautiful" -- but rather placed their money on "what average opinion expects average opinion to be".
This is a fundamental insight. So fundamental that many economic events of the last 70 years cannot be understood without understanding the basic truth that Keynes revealed with this specific gambling analogy.
Andrew Leonard's sports betting analogy is accurate, apt, and useful.
