The economists Justin Wolfers and Eric Zitzewitz have pointed out that Hillary Clinton’s chances of becoming president, as predicted by one betting market, InTrade, started to climb dramatically mid-May, topping 40 per cent after months of fluctuating between 20 and 30 per cent. Her odds of winning the Democratic nomination stayed around 50 per cent, implying that if nominated, her chance of then winning the presidency would be about 80 per cent. You can’t get much more electable than that. So is someone in Hillary’s camp trying to boost her chances by manipulating the market into a self-fulfilling prophecy? Or is it a rival candidate trying to make her look like a manipulator? [...] But it’s hard to manipulate markets for long. [...]
Robin Hanson and Ryan Oprea, economists at George Mason University, argue that manipulators can actually increase the accuracy of prediction in markets: by making big, unprofitable bets they are effectively subsidising the market and paying other traders to pay attention. [...]
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BetFair – Hillary Clinton as the Democratic Presidential Nominee -
BetFair – Winning Party: Democratic -
BetFair – 2008 Election – Female President -
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NewsFutures – Hillary Clinton will be the Democratic Presidential Nominee in 2008.
NewsFutures – A Democrat will be elected President in 2008.
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Previous: Intrade: Obama and Clinton at near-parity – by Alex Forshaw + There’s a deep-pocket Clinton pal who is pushing her event derivative way up. + Who could have masterminded the alleged manipulation of the Hillary Clinton prediction market??? + Manipulation can affect prices. – by Eric Zitzewitz + Is there manipulation in the Hillary Clinton Intrade market? – by Koleman Strumpf + Is there manipulation in the Hillary Clinton Intrade market? Redux. – by Justin Wolfers + Hillary Rodham Clinton – Event Derivatives & Prediction Markets – InTrade-TradeSports + BetFair + NewsFutures = the market-generated probabilities across the different real-money and play-money prediction exchanges + Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.) – by Koleman Strumpf
