Well the betting markets made a big reversal last night, from up to almost 75% in favor of Kerry, now down to a 5% chance for Kerry (even that looks too high, so I finally made my first election bet).
Of course we should expect this sort of reversal at least 1/4 of the time, so one can't be too stunned. But this does at least raise a small suspicion that theses markets were too volatile due to over-confidence. However, one case won't really show this - we have to look at statistics over many events to see if there's a trend.
In the end the important question is comparative - are there any other institutions that on average do better? So far direction comparisons between markets and other institutions in the field have favored markets. And real and play money have come out about the same. But the jury is still out.
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030-4444 703-993-2326 FAX: 703-993-2323
