I don’t think you understand what these prediction markets really imply. You mentioned several events that had a ‘market’-implied chance of happening of ~80%, but ultimately closed at 0%. It doesn’t mean that just because they were at 80% they would go to 100%; it meant that people [*] gave a 80% chance of happening based on information available at that time.
Now because you picked a few contracts that the ‘market’ predicted wrong you are concluding that those markets are flawed or have no use. I disagree. What you should do is take for example a sample of 100 contracts that trade in the 80% range and track how they end. If you find that far less than 80 of them end at 100 then perhaps you have a point. See what I mean?
[*] the market!!!
Barry Ritholtz’s bone of contention: Misunderstanding Prediction Market Failures
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