Hence, we see more potential sources of market failure as these conditions are violated:Chris Masse responds:
1) An insufficient amount of incentives;
2) A lack of diversity of ideas;
The rebuttal is easy:And my 2 cents in the comments:
- Economists Justin Wolfers and Eric Ziztwewitz wrote that, even small, compared to the financial markets, many real-money prediction markets are liquid enough to generate statistically accurate probabilistic predictions.
- Academic papers have shown that IEM’s predictions have been slightly better than the polls, even though their traders are unrepresentative of the general US population.
.1. A dollar is a dollar, and the bragging rights that go with being right and winning are incentives beyond the dollar.
.2. Having a bunch of alleged right wing fanatics trading Obama v. Clinton seems irrelevant to their skewing of interparty contests.
I'd say Barry is 0-2 here. At least Intrade traders maintain a 2-0-2 advantage over Zogby in the 2008 primaries.