Wednesday, June 6, 2012

Intrade questions

What are we to make of Intrade's prediction market for "Barack Obama to be re-elected president in 2012" currently showing a 52.5% chance of that, while Intrade's market for "Mitt Romney to be elected president in 2012" currently is at 42.8%? Is there an almost 8% chance Romney won't be the nominee or that a third-party candidate will win (yeah, right)? Do people arbitrage between Intrade markets (and if not, why not)? Could it be a sign of some deeper flaw in Intrade or the whole concept of prediction markets? Perhaps my actuarial readership will weigh in.

No comments: