If you are getting the insurance by placing bets, then people will be buying the candidates they don’t like. If lots of people don’t like a candidate, that is not a sign that the candidate will do well.
But speculators should be able to get free money from those buying insurance, which will even it out some.
To the extent that they can distinguish, yes, and this may very well leave the markets performing well enough (and perhaps still better than anything else). It does necessarily add noise, however, which I understood to be the original point—it makes things less accurate.
But speculators should be able to get free money from those buying insurance, which will even it out some.
To the extent that they can distinguish, yes, and this may very well leave the markets performing well enough (and perhaps still better than anything else). It does necessarily add noise, however, which I understood to be the original point—it makes things less accurate.