I think either 45-x or 40-x would be the best formula when you pick the wrong winner. As creativename pointed out, it SHOULD decrease hedging (make predictions more honest). Sure, some people might STILL hedge, but it certainly wouldn't be smart to do so. I've hedged quite a few times in this contest, but I wouldn't hedge if it was a "-1x" penalty.

Meanwhile, I don't think 50-x would be such a good idea, either, as there is importance in picking the winner, like Heroic Viktor was saying. Also, I think it IS a good idea to allow some shakeups in the standings still, like ps2rulezzz was saying.

So, I say we do either 45-x or 40-x...

---
"Ah, a party! We haven't had one of those. It could be fun! So...what is a party?"
"Well, you drink punch and eat CAKE! ...I think."