points by jawiggins 5 days ago | 0 comments
Huh, I hadn't considered that. Have you seen research from other sources that demonstrate they are not accurate?
[–] dozerly 5 days ago
[–] jawiggins 5 days ago
> longshots lose 6.3 cents per dollar when each contract is weighted equally but gain 4.1 cents when related contracts are first grouped by parent event; the two-sided pattern is robust in Crypto and Politics but surprisingly absent in Sports.
This seems like a relatively small inefficiency in the markets, no? If the margin of error notable in a prediction markets is <10 cents per dollar, that implies that they are pricing events pretty accurately. Especially post publication of this paper, when sophisticated traders could trade away this inefficiency.
Obviously not compelling on its own though.