The Virtues and Vices of Election Prediction Markets

Tuesday featured what, on the surface, would seem to be a fairly neutral day of polling. …

At the political betting market Intrade, however, traders seemed to have a much stronger opinion about the day’s news. Mr. Romney’s stock, which can be read as a forecast of the chance that he will win the Electoral College, rose to 45.4 percent from 39.7 over the course of the day. [cont.]

Nate Silver, FiveThirtyEight (NYT)