I remain a believer in prediction markets, but it appears that I’ve been quoting the wrong betting odds on the Presidential race. The Intrade market is small and thin compared with the UK gambling site Betfair, and there seems to be some evidence of Romneyites trying to generate false market signals. Right now, Intrade gives Romney about a 40% chance of winning, while Betfair rates his chances no better than 33%.
Footnote Why markets rather than models? Because no model that has a probability number as its outcome can account for the risk that the model itself may be wrong, or that some external event could render it irrelevant. Of course markets can’t tell you about the future, either: all they can do is integrate all the predictive information available in the present, including the efforts of all the model-builders.