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I've posted about prediction markets before, my favorite being http://www.intrade.com/ and in fact I have personally implemented my own virtualfuturesmarket as well (note to EJ - it would be cool if we could have a predictions market game combined with iTulip to see who would be the best at .. another post)
Anyhow, I have recently made some bets on the outcome of the election on Tuesday, and I have bet a certain amount that the Democrats will take the House. I find myself betting probably more than I should given the research I've done on the polls, simply because the prediction markets are already showing a pretty high chance they will win the house.
I wonder if the same occurs with other futures market, such as the one for interest rates. Do people see others betting that a rate hike won't occur? In a way, it almost becomes a self fulfilling prophecy as the Fed is likely leary about hiking when the markets are predicting so confidentally a pause.
Anyhow, I have recently made some bets on the outcome of the election on Tuesday, and I have bet a certain amount that the Democrats will take the House. I find myself betting probably more than I should given the research I've done on the polls, simply because the prediction markets are already showing a pretty high chance they will win the house.
I wonder if the same occurs with other futures market, such as the one for interest rates. Do people see others betting that a rate hike won't occur? In a way, it almost becomes a self fulfilling prophecy as the Fed is likely leary about hiking when the markets are predicting so confidentally a pause.
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