MAKING SENSE -- October 18, 2012 at 12:04 PM EDT
How to Follow the Prediction Markets in Real Time
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Four questions today, since they all concern our recent story on polls, professors and prediction markets.
R Cooper: Where is the live link to IEM, Intrade, and BetFair that is supposed to be on Making Sense page? I can't locate it.
Stephen Foster: How do I get to this link for real time data?
Paul Solman: For the latest odds from Iowa, Intrade and Betfair, just go to our Making Sense website, where we link to all of them in real time.
But the better idea is to go directly to PredictWise, where the three major online betting markets are constantly updated, in real time.
Robert:Mistake in your last article, 1.47 to 1 odds 59.5%, not 68%.
Paul Solman: Thanks for the short question, Robert. Here's a somewhat longer answer. I didn't mean that the odds were 1.47 to 1 (on Obama being reelected President on England's Betfair online prediction market as of Friday, Oct. 12.) Probably shouldn't have used the word "odds" at all but instead "prices," since the way Betfair lists its bets, 1.47 simply means if you bet £1 pound, you'll get back £1.47 pounds if you win. That's why, as I explained in the post, you divide 1 by 1.47 to translate the number into odds: 68 percent. To verify this, go to Betfair and move your cursor over the 1.47 number. The odds will appear, in fraction form: 40/85. That means betting £85 pounds to win £40. Again, 68 percent.
But why bother with all this when you can go directly to PredictWise, where, as I say above, the three major online betting markets are constantly updated, in real time, and expressed as odds. Sorry for the confusion. Glad you gave me this opportunity to clear things up - and to reiterate the convenience of PredictWise.
Ben Harte Jr: After all the facts and truth about Mitt Romney has been put before the public, he's been shown to be the worst person to be a credible candidate for President but is tied with Obama in the polls; how can this be?
Paul Solman: We explored reasons for poll skepticism on Friday's show.
As for poll skepticism, to each his own.
Finally, an unprompted comment. Many of you have written to express skepticism of the prediction markets themselves, noting that on Intrade, for example, the odds were 70 percent against the Supreme Court upholding Obama's health care law, just before the decision was announced. And it should be stressed: a 67 percent chance that President Obama will be elected, which is where the markets are as I write, means that, probabilistically speaking, if the election were run three times, Governor Romney would be expected to win once.
Moreover, these are "thin" markets; not the domain of Wall St. types. As a result, they can be easily influenced. This fascinating post from Nate Silver of 538.com published almost exactly four years ago is well worth reading today.
The CEO of Intrade rejected Silver's speculation. But his reassurance did little to dampen suspicion, both at the New York Times or the Wall St. Journal, that market manipulation for political gain might indeed have been operative.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.