Intrade: Clinton 62.2%, Obama 37.8% (political "futures")

[bidenista]

Trading over at Intrade since the Edwards announcement is showing buyers predicting a Clinton nomination. These stats from RealClearPolitics:

Hillary Clinton to be the Democratic Presidential Nominee in 2008 62.2% $4.1M
Barack Obama to be Democratic Presidential Nominee in 2008 37.8% $3.0M

(Figures shown: percentage, and US$ traded).

For those who want to know more about how Intrade works, check out the Wikipedia article on prediction markets:

Prediction markets are speculative markets created for the purpose of making predictions. Assets are created whose final cash value is tied to a particular event (e.g., will the next US president be a Republican) or parameter (e.g., total sales next quarter). The current market prices can then be interpreted as predictions of the probability of the event or the expected value of the parameter. Other names for prediction markets include information markets, decision markets, idea futures, event derivatives, and virtual markets....

Steven Gjerstad (Purdue) in his paper "Risk Aversion, Beliefs, and Prediction Market Equilibrium" has shown that prediction market prices are typically very close to the mean belief of market participants if the distribution of beliefs is smooth (as with a normal distribution, for example). Justin Wolfers (Wharton) and Eric Zitzewitz (Stanford) have obtained similar results, and also include some analysis of prediction market data, in their paper "Interpreting Prediction Market Prices as Probabilities". In practice, the prices of binary prediction markets have proven to be closely related to actual frequencies of event in the real world.

[ursi]

1. so those who bet on corporations love Hillary! money, money, money!

[bidenista]

2. actually, intrade can be used by anyone. check it out. nt

[Rock_Garden]

3. Good news, bidenista! K&R!

[cobalt1999]

4. So people who are wagering their own money are betting it on Clinton.

However, how accurate has it been historically?

[slick8790]

5. Flavor of the hour, really.

They had Obama at almost 95% pre-NH, and we all know how that turned out. It's basically conventional wisdom, and as this primary season has proved, conventional wisdom is being thrown out the window.