More on the Accuracy of Electronic Markets:
Jim writes, in the post below: "The question is whether experts can usually do a better job than markets. It would seem that the answer is generally No." This is far, far from my expertise, but I'm not sure that is the question. I think the question is whether markets do a good job predicting the discretionary decision of one person, as compared to predicting the collective outcome of the individual decisions of many. I can see markets doing a good job predicting collective decisionmaking, but I don't see the advantage they have in predicting what one person is thinking. Thus, it seems to me that Tradesport users incorrectly predicted Rehnquist would decide to retire because that's what newspapers were incorrectly predicting at the time; ditto for the idea that Clement would be nominated to replace Rehnquist.