According to Tradesports betting, Bush will choose Edith Clement [or Edith Jones].--

[UPDATE: The post below reflected the betting consensus early to mid afternoon. By 5:50pm ET, the betting at had switched, and the favorite was Edith Jones of the 5th Circuit (40-52%), not Edith Clement (19-29%).]


According to betting, Bush will choose Edith Clement to fill the O'Connor vacancy on the Supreme Court. The odds on all other nominees have collapsed. The last trade on Clement was at 88 (an 88% probabilty), and the current bid/ask spread is bid 60 / ask 85.5. So, according to the traders at, there is a 60%-85.5% probability that Bush will choose Clement.

The next highest bids are Jones (5.2) and Owen (5.1), followed by Gonzales at 3.0.

Tradesports and Supreme Court Nominations: I've seen lots of blogging about betting sites on who will be nominated to replace O'Connor, including Jim's post below about the betting at Maybe I am just missing something obvious, but I confess I don't understand why we would expect such sites to reveal anything particularly useful on the question of O'connor's replacement.

  Here's my thinking. The choice of O'Connor's replacement belongs to one man, George W. Bush. A few inside advisors are privy to his thinking, but I think it's fair to assume that neither Bush nor any of his inside advisors are placing any bets on sites like This means that the people who are placing bets presumably are outsiders who are getting their predictions from newspaper articles, blogs, horoscopes, etc., and then placing bets. As a result, a site like TradeSports would seem to just mirror the collective common wisdom of newspapers and blogs on a question like this. Am I missing something?
The Accuracy of Small-Volume Electronic Markets.--

Orin Kerr asks about the accuracy of electronic markets. Saul Levmore has an interesting review of the evidence:

Efficient Markets and the Role of Regulation: Lessons from the Iowa Electronic Markets and the Hollywood Stock Exchange Symposium: Revisiting the Mechanisms of Market Efficiency, 28 J. Corporation L. 589 (2003).

Levmore reviews the evidence that even small fantasy markets with little money at stake and thin trading do an extraordinary job predicting outcomes. Those who log on through their law school or law firm computers might be able to download the article at

I'm reasonably certain that predicted the outcome of every state in the Nov. 2004 election, even New Hampshire, Iowa, Wisconsin, and New Mexico. That said, markets are frequently wrong; a recent Tradesports example is that traders overwhelmingly thought that Rehnquist would step down before O'Connor. The question is whether experts can usually do a better job than markets. It would seem that the answer is generally No.

UPDATE: By the way, Edith Clement's odds (actually, probabilities) have dropped to 32-48%, while Edith Jones's odds (probabilities) have risen to 27-31% by 5:10pm ET.

2d UPDATE: Cass Sunstein is dicussing information aggregation and markets at Lessig's blog.

And Jones is now (5:30 ET) at 50-54%, while Clement has dropped to 20-28%.

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.
According to Tradesports Betting, President Bush Will Pick John Roberts: Although gave John Roberts less than a 1% likelihood of getting the nomination as of about two hours ago, right now it is giving Roberts a 99.5% chance of getting the nomination. Looks like Tradesports was right after all -- at least after the announcement was made.
Trading in Roberts Futures at Tradesports.--

Given our discussion earlier today, I thought that people might be interested in this chart of trading in Roberts futures at Tradesports since about 6:30pm ET.

(click to enlarge)

This is a 2-trade moving average.

As you can see, Roberts became the favorite for the first time about 6:47pm ET (there were several trades between about 6:47 and 7:02 at a price of 30-40) [see update below with more precise data. Roberts became the close 2d favorite to Jones about 6:48 and the favorite for the first time at 7pm, after which he dropped below Jones and then overtook her again at 7:40pm about 6 minutes before the choice was announced by AP.] The market anticipated by about an hour the NBC announcement at about 7:47 that AP was reporting Roberts as the nominee[, but only by making him one of the top two favorites with Edith Jones]. So Clement, the early betting favorite, was replaced by Jones as the betting favorite, who was replaced by Roberts as the betting favorite, who has remained so until just before Bush's news conference.

I still await the actual announcement in a few minutes.

UPDATE: While I was writing the above post, Orin posted on this topic, so I went back and checked some of the other nominees just to be sure who was the favorite at what time, downloading the actual trading data for Roberts, Jones, and Luttig. While Roberts first jumped up to a price of 30% at 6:48ET (about an hour before AP broke the story), Edith Jones was then trading at about 35.7%, so Roberts was then running a close second to Jones. Roberts briefly became the favorite at 41.9% at 7pm (and his next 5 trades were 38% or above), after which he remained one of the favorites along with Jones and Luttig until 7:40 when he overtook both of them for good to trade at 25. Roberts rose to about 30 at 7:43, 30-55 at 7:44, 50-55 at 7:45, and he jumped from 60 to 90 at 7:46.

At 8:38pm, Orin posted:

Although gave John Roberts less than a 1% likelihood of getting the nomination as of about two hours ago, right now it is giving Roberts a 99.5% chance of getting the nomination. Looks like Tradesports was right after all — at least after the announcement was made.

This is incorrect or misleading:

1. At 6:38pm ET, exactly two hours before Orin's post at 8:38pm ET, Roberts had most recently traded (at 6:34pm) at 10%, not 1%, which made Roberts one of several favorites (see the chart above). Roberts had, however, traded at 1% just 45 minutes before that (at 5:55pm).

2. At 6:48pm (almost two hours before Orin's post and nearly an hour before the final press leak), Roberts became one of the top two favorites for the first time, trading at 30. At 7pm, for the first time, Roberts became the favorite at 41.9%. After remaining one of three favorites for the following 40 minutes, Roberts became the favorite for good at 7:40pm.

As Frank Cross has noted, people may expect too much of trading markets. If they function well, they reflect the best estimate (at the time of the trade) of the occurence of a future event. As information changes, estimates can and should change. Whether you think Tradesports did a "good" or a "poor" job reflecting the best estimates of who would be appointed depends on your point of view, and the time frame chosen. Two hours before the 7:46pm AP/NBC report that Roberts was the nominee, Tradesports gave no hint that Roberts would be chosen. About one hour before the announcement, Tradesports began showing him as one of the three favorites, which was far from a consensus view at the time. Certainly, I continued to share the view of many experts that Bush would probably choose a woman or a minority. About 5-6 minutes before the AP/NBC press announcement, Roberts finally edged ahead to stay.