Predictit puts Le Pen at 40% (now down to 34%), but the much larger Betfair (orig) puts her at 22%. Generally you should quote Betfair because it is larger, because it doesn’t limit individuals. The only advantage of Predictit is that it is open to Americans, but that is probably only relevant to American elections.
Even Betfair’s prices only represent a million dollars worth of betting. $20k of betting after the American election moved Le Pen up to 40%. I don’t know how long it took to correct that, but clearly faster on Betfair than on Predictit. (And I don’t know whether the market changed its mind or incorporated the new information of the center-right primary.)
Thanks for the insight on the difference between Predictit/Betfair—I wasn’t aware of this liquidity difference. Although so long as there is a reasonable amount of liquidity on Predict it, it’s very strange the two are not in equilibrium. Do you know if there are any open theories as to why this is?
One thing I notice is a lot of commenters on PredictIt are alt-right/NRx. It seems unlikely, but I wonder if different ideological priors are pushing different prediction markets away from a common equilibrium probability.
Don’t read too much into small bets.
Predictit puts Le Pen at 40% (now down to 34%), but the much larger Betfair (orig) puts her at 22%. Generally you should quote Betfair because it is larger, because it doesn’t limit individuals. The only advantage of Predictit is that it is open to Americans, but that is probably only relevant to American elections.
Even Betfair’s prices only represent a million dollars worth of betting. $20k of betting after the American election moved Le Pen up to 40%. I don’t know how long it took to correct that, but clearly faster on Betfair than on Predictit. (And I don’t know whether the market changed its mind or incorporated the new information of the center-right primary.)
Thanks for the insight on the difference between Predictit/Betfair—I wasn’t aware of this liquidity difference. Although so long as there is a reasonable amount of liquidity on Predict it, it’s very strange the two are not in equilibrium. Do you know if there are any open theories as to why this is?
One thing I notice is a lot of commenters on PredictIt are alt-right/NRx. It seems unlikely, but I wonder if different ideological priors are pushing different prediction markets away from a common equilibrium probability.
Maybe there isn’t a reasonable amount of liquidity on Predictit. It is now down to 22%, from 34% when I wrote my comment, maybe an hour ago.
Predictit has a time series, but only daily updates. Betfair has a detailed chart without labels on the time axis.