Koleman Strumpf on the Hillary Clinton prediction markets:
I think the market behavior since the original posting still could be consistent with no manipulation.
(1) At the time of my original post (Is there manipulation in the Hillary Clinton Intrade market?), Clinton’s conditional probability of getting nominated was 65%. It is now about 60%.
(2) Is there any news which might explain this drop? Sure– the market has decided that Obama is a much stronger contender for the nomination (and conversely Hillary is weaker). Namely, since the end of May, Hillary’s nomination contract fell from 51 to 43 and Obama has risen from 29 to 38. If the market thinks that the nomination is more unclear, then it is more likely there will be a protracted fight, and, even if Hillary gets the nod, she will be weaker and not be as likely to win the general contest.
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