Author Archives: Eric Zitzewitz

About Eric Zitzewitz

Economics (Dartmouth College) - Massachusetts, U.S.A.

Is weather betting legal if you bundle it with auto leasing?

Pride Motors, a Boston area car dealer, is advertising the following special: Lease a car before August 26, and if it’s above 96 degrees at Boston Logan Airport on Labor Day, they will make your first 12 lease payments for … Continue reading

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VP conditional probabilities

BetFair is running markets on both who will be the next vice president and who will be nominated by the two parties. As we’ve discussed before in other contexts, one can divide two probabilities like these to obtain a conditional … Continue reading

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If Musharraf goes, should we celebrate?

Benazir Bhutto made a compelling case in the Sunday New York Times that she would be a better partner for the West than Musharraf. As she noted, $10 billion in U.S. aid since 2001 has not resulted in the elimination … Continue reading

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Volumes on InTrade are way up from 2004.

Just thought this might interest some of you: Total volume in 2004 Democratic nomination markets: $5.2 million (data is taken from a talk I gave in San Diego) Volume in 2008 Dem and GOP nomination markets (with 7 months to … Continue reading

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Is Manipulation Good for a Prediction Market? Accuracy Isn’t Everything.

Michael Giberson made a point in a recent post that is worth repeating: “I think the potential for manipulation troubles some prediction market folks because it puts an implied asterisk next to any prediction market price that says “caution: the … Continue reading

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An Employee Stock Option Prediction Market

Floyd Norris writes that the SEC is considering allowing firms to expense their employee stock options using valuations from a small-scale auction run by Zions Bank. Early auctions have yielded values way below Black-Scholes and other methods. Norris is skeptical … Continue reading

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Manipulation can affect prices.

For the last two weeks a very interesting manipulation has been going on in Intrade‘s “Hillary Clinton for President” contract. 1. The contract had been trading between 23 and 26 all year. It has consistently been about half the price … Continue reading

Posted in All Best Posts Ever, All Guest Authors's Posts, Analysis (Market Calls), Exchanges & Markets, Market Prices & Probabilities | Tagged , , , , , , , , , , | 10 Comments

XM-Sirius merger

So at Justin’s and my suggestion, Intrade has just listed a contract on whether the XM-Sirius merger will close. (We’ve been waiting for a nice, juicy, controversial merger like this ever since Hp-Compaq.) Interestingly, the MM has it at 60 … Continue reading

Posted in All Guest Authors's Posts, Business, Exchange Genesis, Exchanges & Markets | Tagged , | 4 Comments

Thoughts on Weather Bill

See this article on the new firm, which will offer daily weather prediction market-like contracts on temperature and precipitation (our host mentioned them earlier today). A couple thoughts: 1. I really don’t see that many accredited investors having so much … Continue reading

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