It’s interesting to learn how how the dollar amount being placed on the bet was turned into percentage points. I was confused about that. Thanks for making it clear!
Just to make sure that I understand: does it make sense to describe the situation in terms of what I would call a hot potato dynamic?
In the beginning, the “No” shares are a cold potato, because most people don’t believe that Jesus will actually return.
But the incentive for people to buy “Yes” shares is their expectation that the people holding the “No” shares will sell their position later for money to place on other bets.
When the “No” shares are sold, they are sold for less because those who sell them expect a better profit the mayoral race than from the prophesy of Jesus returning.
So the people who bought “Yes” shares in the beginning can make a profit for a while—the potato is hot. People might even buy “Yes” shares because they expect more people to sell “No” shares in the future.
But at some point people will stop selling “No” shares. And those holding the “Yes” shares won’t be able squeeze anymore profit—the potato has now cooled, as it were.
Thank you for taking the time to clarify things for me!