How Do You Know if a Prediction Market is Any Good?

Michael Giberson

If you have a long political memory — say going back about two weeks, which now seems like ages ago — you might remember the furor over the “failure” of polls and prediction markets when Hillary Clinton won the New Hampshire Democratic primary. Prediction markets, the boastful new kid on the block, were singled out for special abuse by some pundits.

Were the prediction markets wrong? How should the market numbers be read, and how can the accuracy of these markets be judged?

Prediction market consultant Jed Christiansen provides the most thoughtful post-New Hampshire guide to reading the political prediction markets, with generous links to other sources.

(HT to Chris Masse at Midas Oracle, and Caveat Bettor, and Alex Kirtland at UsableMarkets.)