http://www.midasoracle.org/2008/07/18/low-intrade-probabilities/ Prediction Markets For All Thu, 20 Nov 2008 10:59:56 +0000 http://wordpress.org/?v=2.6.3 http://www.midasoracle.org/2008/07/18/low-intrade-probabilities/#comment-20763 Jason Ruspini Fri, 18 Jul 2008 20:05:18 +0000 http://www.midasoracle.org/?p=7602#comment-20763 The contracts should be re-worded to work as the nominations ones do. If a candidate dies, all contracts in the group are settled and then a new set is re-launched.  These rules could probably also be modified with merging logic to preserve open interest. . There are a few factors contributing to the favorite/longshot bias on Intrade, e.g, the fees, the lack of interest paid to most positions, the difficulty of funding accounts, liquidity preference for winning traders in some markets, and the generally high risk appetites of traders - who seem uninterested in what would be very good returns in more familiar markets. The contracts should be re-worded to work as the nominations ones do. If a candidate dies, all contracts in the group are settled and then a new set is re-launched.  These rules could probably also be modified with merging logic to preserve open interest.
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There are a few factors contributing to the favorite/longshot bias on Intrade, e.g, the fees, the lack of interest paid to most positions, the difficulty of funding accounts, liquidity preference for winning traders in some markets, and the generally high risk appetites of traders - who seem uninterested in what would be very good returns in more familiar markets.

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