As Justin Wolfers noted, maybe there are today bigger practical obstacles to prediction market arbitrage.

Posted on September 26, 2008 by Chris F. Masse

- Legal restrictions for US traders on foreign prediction exchanges (BetFair, etc.);

- Transaction fees (you would need to operate on 2 exchanges);

- Currency risks and cost for hedging on that.

Eric Crampton (a Canadian exiled in New Zealand) says he has managed to turn a buck, though, by arbitraging between InTrade and iPredict New Zealand. He also makes 2 theoretical points. Go read it.

About Chris F. Masse

Founder and President of Midas Oracle
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