AdamT
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I and at least one other poster noticed that the Intrade odds underwent a pretty massive shift following the third debate, with Obama's odds of winning plunging from something like 62% before the debate to as low as about 56.5% earlier this afternoon. Since then they have steadily climbed back to 60%. So roughly a seven point swing in the course of one day, after a debate that Obama is generally considered to have won. Curious, right? I've been following Intrade this election and usually it's nowhere near that volatile.
Nate Silver of FiveThirtyEight wrote a blog post that sheds some light on the situation. According to Silver, much of the change was the result of a single individual placing very large bets on Romney. As Silver notes, we can only speculate as to what was behind that, but he notes that similar events happened in the '08 election. One possibility is that a Romney partisan, or perhaps even someone from the campaign or a super pac made the large bets in an attempt to steer public opinion after the debate. Romney supporters were eager to make the argument that, even if Obama won the debate, it was close, and a close win for Obama was reeaaally a win for Romney. Because commentators can have a herd mentality, one way of directing the conversation that way would be to cause a significant pro-Romney shift on Intrade.
Implausible? I don't think so. As Silver points out, if it was really just someone who wanted to place a big wager on Romney, he or she could have done so more cheaply on any number of betting sites. So either someone was trying to move the Intrade odds, or he or she was ignorant of the odds and other available options. I think it's unlikely that someone with that much money, and that much interest in the race, would fit either category.
I will certainly be more skeptical of Intrade going forward.
An interesting read: Oct. 23: The Virtues and Vices of Election Prediction Markets - NYTimes.com
Nate Silver of FiveThirtyEight wrote a blog post that sheds some light on the situation. According to Silver, much of the change was the result of a single individual placing very large bets on Romney. As Silver notes, we can only speculate as to what was behind that, but he notes that similar events happened in the '08 election. One possibility is that a Romney partisan, or perhaps even someone from the campaign or a super pac made the large bets in an attempt to steer public opinion after the debate. Romney supporters were eager to make the argument that, even if Obama won the debate, it was close, and a close win for Obama was reeaaally a win for Romney. Because commentators can have a herd mentality, one way of directing the conversation that way would be to cause a significant pro-Romney shift on Intrade.
Implausible? I don't think so. As Silver points out, if it was really just someone who wanted to place a big wager on Romney, he or she could have done so more cheaply on any number of betting sites. So either someone was trying to move the Intrade odds, or he or she was ignorant of the odds and other available options. I think it's unlikely that someone with that much money, and that much interest in the race, would fit either category.
I will certainly be more skeptical of Intrade going forward.
An interesting read: Oct. 23: The Virtues and Vices of Election Prediction Markets - NYTimes.com
