09 Jan 2008
Paul Krugman on Prediction Markets
Looks like he feels about how I do on the evidence:
Nobody knows anything
Dewey defeats Truman
But to be more specific, the prediction markets — which you see, again and again, touted as having some mystical power to aggregate information, know no more than the conventional wisdom. Here’s the Intrade price for “Clinton wins the Democratic nomination” over the past month:
Clinton as nominee
From inevitability to pitiful failure to front-runner again in just a few days. There’s no hint that the market saw either Iowa or New Hampshire coming, or knew anything beyond the bloviations of the talking heads.
January 18th, 2008 at 02:52 -0600
[...] indicated here, Krugman does not seem to think prediction markets are as at aggregating information as their [...]