Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.)

Koleman Strumpf May 31st, 2007

Justin and Eric would like to put some stakes on whether there is a manipulation. In particular, they want to base it on whether intrade’s Hillary-for-president stock goes up or down in the next month.

While I always like a good bet, I am not sure how this one addresses whether there is manipulation. Under efficient markets, Clinton’s stock is as likely to rise as to fall. So even if there is no manipulation and everything is working fine, Justin and Eric will win the bet half the time. And even if her stock were to rise and I would get a box of Cohibas, this could just mean that Mr Manipulator is still being successful (perhaps because of deep pockets).

My concern all along has been that the unusual prices at Intrade are mirrored at the other exchanges. I think perhaps a better bet (if one which is harder to operationalize) is whether Clinton’s conditional probability will get decoupled across the various exchanges.

All Best Posts Ever , All Guest Authors's Posts , Analysis (Data) - Manipulations , Exchanges & Markets , Prices & Probabilities
Comments(2)

2 Responses to “Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.)”

# Eric Zitzewitz on 31 May 2007 at 1:42 pm

Chicken.

In all seriousness, it is interesting that other exchanges have followed Intrade. This probably means that we should think of these markets as one large linked market. As Alex Forshaw pointed out, comparing bid/ask sizes and volumes at Betfair and Intrade suggests that most of the market is at Intrade. (It’d be nice to know how much volume the various bookies are doing).

I did check Betfair before making the comment at Palm Desert, and it was Bid 27/Ask 33 or so (when Intrade was at 40), so the spike must have been afterwards (I wish BetFair put time on their graphs). Probably the case that whoever drove the price up at Intrade did not have a Betfair account, and it took a little while for someone with accounts both places to jump on the arb.
# Chris. F. Masse on 31 May 2007 at 1:54 pm

BetFair Historical Data
http://data.betfair.com/

CAT GOT PROFESSOR KOLEMAN STRUMPF’S TONGUE????
http://www.midasoracle.org/200.....fs-tongue/

PROFESSOR KOLEMAN STRUMPF STILL DOUBTS THAT THERE HAS BEEN MANIPULATION OF THE HILLARY CLINTON EVENT DERIVATIVES.
http://www.midasoracle.org/200.....rivatives/