The way I read his post it didn’t seem to me that he believed that the Intrade odds were an obvious overestimate for reasons unspecified. Rather it seemed that he proposed two possible reasons for the odds being overestimated. One was that the wishful thinking of Ron Paul supporters explained the overestimate, the other was that Ron Paul supporters were deliberately bidding up the market as a marketing exercise.
The weakness of the second explanation has already been pointed out. The first explanation is only an explanation at all if Ron Paul supporters are consistently more likely to be prone to wishful thinking than others. I was curious what taw’s reasons for believing that are.
It turns out that the explanation may be that all candidate’s supporters are prone to wishful thinking—we discussed in a separate thread the fact that Intrade appears to make it difficult to arbitrage consistent over-estimates of the odds of winning in this particular market. If that’s the case taw is probably right that the 3.5% is an overestimate for Ron Paul but was wrong to single out any one candidate as an example of a clear persistent overestimate in a prediction market.
The way I read his post it didn’t seem to me that he believed that the Intrade odds were an obvious overestimate for reasons unspecified. Rather it seemed that he proposed two possible reasons for the odds being overestimated. One was that the wishful thinking of Ron Paul supporters explained the overestimate, the other was that Ron Paul supporters were deliberately bidding up the market as a marketing exercise.
The weakness of the second explanation has already been pointed out. The first explanation is only an explanation at all if Ron Paul supporters are consistently more likely to be prone to wishful thinking than others. I was curious what taw’s reasons for believing that are.
It turns out that the explanation may be that all candidate’s supporters are prone to wishful thinking—we discussed in a separate thread the fact that Intrade appears to make it difficult to arbitrage consistent over-estimates of the odds of winning in this particular market. If that’s the case taw is probably right that the 3.5% is an overestimate for Ron Paul but was wrong to single out any one candidate as an example of a clear persistent overestimate in a prediction market.