Did the Futures Markets Fail?

I just wrote about this a few days ago, but here it is again. Daniel Gross asks: “Why were the political futures markets so wrong about Obama and Clinton?”
The answer is that they weren’t wrong. They’re not predictions markets, they’re odds-setting markets. There’s a big difference.
Going on the little evidence it had, the futures market declared Hillary a longshot, and she beat the odds. That’s not a market failure. That’s…beating the odds.
That’s like saying Google’s IPO was a failure because the stock has climbed so much since then.

Posted by on January 9th, 2008 at 12:41 am


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