Liquidity and the Future of Prediction Markets. Bitcoin Tech Talk Issue #212

We live in a strange time. The election is set for Tuesday and there are so many conflicting reports of who’s going to win that it’s hard to cut through the noise. What’s really interesting this election is that both sides seem confident that they’re going to win. To some degree this has been the case in every presidential election, but it seems to have intensified much more this time.

By comparison, the 2000 election was very different. Though each side was confident that it would win, everyone knew the election was going to be close. This year, there are more people on both sides that think they’re going to win by a landslide. Obviously, they can’t both be right, but there are going to be more people that are more wrong. What’s going on here? How is it that so many people have such wildly different expectations? The answer seems to be information flow.