It is common across prediction markets that the fee structure makes it not worth it to push extreme events to further extremes. Thus unlikely candidates have too much mass and the total adds up to more than 1. But maybe Predictit is even worse for the reasons Anders gives.
You can build systems that preserve sum of probabilities = 1. They’ll still see bias away from the extremes, because of fees and because of time value of money. But you can do a lot better than PredictIt. (One thing that helps on the fees side is to make fees go down for trades near the extremes; I argued for that in detail on Augur here.
It is common across prediction markets that the fee structure makes it not worth it to push extreme events to further extremes. Thus unlikely candidates have too much mass and the total adds up to more than 1. But maybe Predictit is even worse for the reasons Anders gives.
You can build systems that preserve sum of probabilities = 1. They’ll still see bias away from the extremes, because of fees and because of time value of money. But you can do a lot better than PredictIt. (One thing that helps on the fees side is to make fees go down for trades near the extremes; I argued for that in detail on Augur here.