Thursday, December 04, 2008

Felix Salmon gives up on Intrade

after getting fleeced in fees:

I recently withdrew money from an InTrade account I've had for some years. The total cost of withdrawing the money was $53.10: A $20 fee to InTrade for "processing the bank wire", a €10 ($13.10) wire-transfer fee to National Irish Bank, and a $20 fee to Bank of America, the intermediary bank via which the money arrived in my Citibank account. If Citi had charged their customary $25 incoming wire fee, the total would have been $78.10.

You need to have a very large balance at InTrade, or an incredibly successful trading strategy, to make trading there worthwhile if it costs the best part of $80 just to withdraw your money. And prediction markets need a critical mass of users, otherwise they die. InTrade, for one, can count me out.

I was considering prediction market incentives given Paul Tetlock's research a year ago. Clearly, Intrade policies are not helping the prediction market cause.

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