Monday, October 29, 2012

The Parallel Universe of Intrade

Intrade continues to be a parallel universe where President Obama is a shoo-in for reelection, largely resembling Nate Silver's fanciful 538 column in the New York Times. (I last wrote about Intrade on Oct. 26.)

For those who don't follow Intrade, it is a predictions market, i.e. a gambling site, where bettors can wager on the outcomes of various events including elections. The price of a contract represents what market participants believe is going to happen. A contract sells on a scale of 0 (i.e. event won't happen) through 100 (i.e. event will happen). 

The Mitt Romney to win the presidency contract is now selling at 38 (and the linked Obama to win contract is selling at 62), which seems quite ridiculous to anyone who has been following the polls. Romney hit the mid-40s after he did well in the debates against President Obama. Before the debates Romney had fallen as low as 21.

Of greater interest are the prices for contracts as to which crucial battleground states Romney and Obama will win.

These are the current prices for those state-level presidential races (prices in parentheses are as of Oct. 26):

CO 51.6 for R (roughly tied around 50)
FL 72.8 for R (72 for R)
IN 92.8 for R (93 for R)
IA 64.1 for O (65 for O)
MI 86.3 for O (87 for O)
MO 95 for R (95 for R)
NV 82.2 for O (80 for O)
NH 60 for O (57 for O)
NC 75 for R (79 for R)
OH 57.6 for O (63 for O)
VA 52.3 for R (52 for R)
WI 75.8 for O (75 for O)

As I wrote on Oct. 26, perhaps this mixed outlook on battleground states is making bettors give the win to Obama. I think they'll be proven wrong in the end.

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