CEO Termination prediction markets, anyone??

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New York Times&#8217- Andrew Ross Sorkin:

Betting on the Next Wall Street C.E.O. Exit

[…] Paddy Power, the Irish gambling site, has decided to tap the wisdom of crowds and set odds on who the next C.E.O. casualty will be. […]

Andrew Ross Sorkin does not know what he is talking about. PaddyPower is a bookmaker (which does not prove to us that it balances its book on those CEO Termination betting lines), and not a prediction exchange like InTrade (which, indeed, taps &#8220-the wisdom of crowds&#8221- and is wide open about it).

CEO Resignations

UPDATE: Niall O&#8217-Connor&#8230-

The over-round on Power&#8217-s market is 154.8. This means that they expect to pay out 100 for every 154.8 that they take in- yielding an expected profit of 54.8/154.8 = 35.4%. This is of course a disgrace. It reflects the fact that the market is nothing more than a gimmick – as soon as they catch sight of anybody looking to get a decent bet on, it is likely that they will simply close the book. A clear case of tapping into the wisdom of fools!

2 thoughts on “CEO Termination prediction markets, anyone??

  1. Niall O'Connor said:

    The over-round on Power’s market is 154.8. This means that they expect to pay out 100 for every 154.8 that they take in; yielding an expected profit of 54.8/154.8 = 35.4%. This is of course a disgrace. It reflects the fact that the market is nothing more than a gimmick – as soon as they catch sight of anybody looking to get a decent bet on, it is likely that they will simply close the book. A clear case of tapping into the wisdom of fools!

  2. Niall O'Connor said:

    The over-round on Power’s market is 154.8. This means that they expect to pay out 100 for every 154.8 that they take in; yielding an expected profit of 54.8/154.8 = 35.4%. This is of course a disgrace. It reflects the fact that the market is nothing more than a gimmick – as soon as they catch sight of anybody looking to get a decent bet on, it is likely that they will simply close the book. A clear case of tapping into the wisdom of fools!

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