mcg wrote:
If I recall, In 2008, intrade gave Paul somewhere around a 10% chance of winning the GOP nomination (clearly way too high). Part of the reason for this is that intrade makes you post your worst-case losses at no interest. Intrade tends to overestimate the likelihood of long shots because there is little to no profit to be made shorting them (You would usually be better off sticking your money in a CD for year). Intrade needs to pay interest or let you sell contracts without posting the margin if they want to accurately measure the probability of unlikely events occurring.
Obviously after an event the odds of it occurring settle at 100%.
but was 10% really to high a chance in 2008?
McCain certainly was not a certainty.
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